Condition Bear Market
S&P Target 970
Hedge XLE -5.98%

Position Date Return Days Call
BKI 5/31/2011 7.85% 92 Hold
CFI 6/22/2011 2.48% 70 Hold
SE 6/27/2011 1.85% 65 Hold
AWR 7/5/2011 -3.64% 45 Closed
CLH 7/6/2011 1.07% 56 Hold
GCI 7/14/2011 -15.14% 48 Buy
AGO 8/5/2011 8.78% 26 Hold
DISH 8/10/2011 12.36% 21 Hold
NA NA NA NA NA
NA NA NA NA NA
Mousetrap Return 1.95%
S&P Return -5.63%
Hedged Return -3.28%

Mousetrap Annualized 13.48%
S&P Annualized -38.91%
Hedge Annualized -22.67%

Annualized Advantage 52.39%
Hedged Advantage 16.24%

Sometime in the next day or two I plan to show back-tested market calls and each associated strategy, as well as the conceptual foundation for the sector rotation model, as it relates to the work of Sam Stovall.

Until then, the long-only option is beating the S&P at a comfortable rate, while the hedged option is lagging.

Anecdotally, such an imbalance shouldn’t last, and it is quite likely that we will exhaust the current mini-rally near this level.

GCI is the current “Buy”, but a discretionary trader might want to wait until the market turns down for a spell.

Tim