The model on a weekly basis improved its score every day and finished the week at -33. Still negative, but at a level which could easily turn positive very soon if a couple of spread indicators make a further positive improvement. I have analyzed the individual components and we are not very far off from that happening in the next several sessions. A big battle is raging between Risk On and Off and we are witnessing it daily.
Individual shares have been pummeled and some very bad damage has been done to a variety of leading shares that have been flying high. I encourage you to work with the Database to see if your portfolio needs to be changed in composition. High quality shares are likely to outperform high beta names. The name of the game has changed from Growth to Capital Preservation. But now there are some very good bargains. See if your favorite names have reached areas you consider as value and see how they are performing against the Benchmarks in the Database. I continue to nibble at some good names, there is very little reason not to. Markets are deeply oversold and you can definitely expect bounces of good quality names.
We have brought you an additional indicator in the “Deviations” Tab of the Member Page, where you can monitor the market when it is outside statistically significant level and can be invested in safely into aggressive down moves. We will narrate its movements in this blog when something important is shown, as was in December 2018.
A video of my detailed expectations for the near term, with important levels to watch, can be viewed at https://youtu.be/fFvuXJg2ssk