Today, despite a 2.5% rally in SPX, the model only gained marginally to +36.  This means that the spread relationships are not improving anywhere near the pace of price.  Fortunately, we still have our full allocation in equities thanks to the counter-trend models being long. All this means is that the market got ahead of itself and is now working off its oversold conditions.  The models will sell at +5.00% from buy level or at -3% or after 15 trading days.  Unless the spread relationships which power the Risk model substantially improve, this market is not going to be a happy place very soon.

 

As far as sectors go, I want to draw your attention to XLV. It goes down less than the market and improves with the market. This is a sign of a good sector to hold.

 

As far as individual shares are concerned, on a day when the market powered ahead, these shares were extreme laggards: MO, KR, GWW, AZO, CA & CAG.  This is a sign of long term weakness.

 

Far outperforming the market were HRB, GILD, OMC, JNPR, REGN & XEL.  This is a sign of long term strength and you should investigate if they are a good fit for your portfolio.

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