03/10/2013 Mousetrap

[Timothy Clontz]

Sector Model XLI 1.90%

Large Portfolio Date Return Days
BBRY 7/16/2012 80.14% 237
SEAC 9/25/2012 36.96% 166
CAJ 9/25/2012 3.87% 166
CFI 10/31/2012 51.39% 130
RE 11/26/2012 22.71% 104
BOKF 2/4/2013 7.81% 34
SWM 2/12/2013 4.95% 26
GMCR 2/19/2013 19.10% 19
OKE 2/25/2013 -4.58% 13
TTM 3/4/2013 5.80% 6

S&P Annualized 8.35%
Sector Model Annualized 26.59%
Large Portfolio Annualized 32.82%


From: http://market-mousetrap.blogspot.com...thing-yet.html

Full stop – no rotation for Monday.

As I noted on Friday’s post, the sector model has been in transition this week, and ended with a position in XLI.

Thanks to a request from one of the readers, I’ve changed the reporting on the sector model to only include the profits in the latest call, which is 1.9%.

There are some other changes that aren’t visible yet, but soon will be:

I’ve personally transitioned to a hedged version of the model. Although I won’t be reporting the hedged trades, there WILL be occasions that the “cash account” version of the model on the blog will be affected. When the hedged version of the model reflects a bearish bias in the market, some (or possibly all) of the blog trades could end up in cash.

That actually should increase the performance of the model, by avoiding some of the more negative events of the market. While no one can perfectly time the market, there are times when it is prudent to raise some cash.

Under the hood, then, this week has seen the hedged model move from a net 100% long bias, to a net 60% long bias. That’s still bullish, but not quite as bullish as it was just a week ago. The positive thrusts of the market lately are not being supported by breadth and money-flow. It’s like a moving car when you lift up on the accelerator. You still have forward momentum, but the car itself will eventually decelerate.

No changes are visible on the blog… YET. But caution is warranted. If you’re someone who uses margin, you may want to review your trades and make sure you’re comfortable with a market that may find itself slowing during the next few months.

In particular, retail and recreation stocks are most likely to slow first, which indicates a hit on parts of the economy that people “want” instead of what they “need.”

Tim

[Timothy Clontz]

Sector Model XLI 2.14%

Large Portfolio Date Return Days
BBRY 7/16/2012 115.86% 240
SEAC 9/25/2012 43.94% 169
CAJ 9/25/2012 4.68% 169
CFI 10/31/2012 41.59% 133
RE 11/26/2012 22.89% 107
BOKF 2/4/2013 8.78% 37
SWM 2/12/2013 5.01% 29
GMCR 2/19/2013 23.02% 22
OKE 2/25/2013 -4.72% 16
TTM 3/4/2013 6.32% 9

S&P Annualized 8.44%
Sector Model Annualized 24.58%
Large Portfolio Annualized 35.65%


From: http://market-mousetrap.blogspot.com...-position.html

First cash position: selling TTM with no replacement.

The model is showing that the long bias in the market is continuing to weaken. It is STILL long, but only with net 30% strength.

Please keep in mind that this “bias” on the model is not directly related to the market as a whole – only to current investment opportunities within the industries I monitor.

As always, a negative gap would prohibit the sale.

Tim

[Harry]

Hi Tim,

When you get a chance, can you elaborate on you definition of the buy/sell gaps that prohibit a trade in your model? Meaning, is it fixed on a %, $ amount or simply a discretionary call?

When their is both a buy & sell signal, if both gap away, are both gaps analyzed as a whole or would a single gap negate a transaction?

Thanks,
Harry

[Timothy Clontz]

If I'm trading one stock for another and they gap together, I'll still trade.

In the case of TTM, it will be against the dollar, since it's going to cash -- which is unusual for the model.

But if the sell gaps down and the buy gaps up, I don't want to chase the trade. I'll just recalculate for another day.