The model score today is -5, the first negative score since September 2016. This means that the market is deteriorating fast internally. It closed -1.4%. The market is digesting its losses. This is ultimately bearish.
I want to remind you that our positioning longs in SPY are now trading longs and will be sold should the market close over 3% lower than the “purchase price”, 5% higher, or, in any case, after 15 days of purchase if neither condition has been met. We will, at some stage within the next 15 days be in a “risk off” position, most likely.
Owners of GILD, ATVI, DE, HRB, SYMC, ALK, ARNC, & HP should examine whether it is worth holding these stocks, as the position is rapidly deteriorating in those names.
Our asset allocation is unchanged from yesterday, but we will definitely make use of any rally to reduce equity allocations and increase cash.