Complete collapse, as expected and signaled by the deeply negative spread score. You ignore risk spreads at your peril. Scores now as negative as at depths of 2015,’11 and ‘08.
The weekly Counter-trend model has given a buy signal and we will be buying SPY. This model has a -3/+5% risk tolerance and an automatic close after 15 trading days if neither achieved. We are in Risk OFF, so this is a trade, NOT positioning. All we are looking to do is enhance returns.
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 going forward. The name of the game has changed from Growth to Capital Preservation.
A video of my detailed expectations for the near term can be viewed at https://youtu.be/XNPKGDpfF8U
How do you think about sizing for the countertrend models? Does it fit either the 20% or 60% sizes from the main model?
The model actually buys 100% and then exits 100% on an exit signal (-3% or +5% or 15 days) and returns to the previous stance, long TLT.
This is what it does all the time, there will be no change.
Apologies for not seeing the Q. earlier.
To be clear then, if you have a total portfolio of 500k and SPX trades at 1000, one would enter with 500k in SPX with a stop at 970 and close position at 1050 or day 15 whichever comes first. Thanks!