The model score today is –15, which is no material difference to yesterday’s, despite the strong rally. This means that the market is still not recovering enough internally and is merely working off extreme oversold conditions.
Unless price stabilizes at much higher levels, the asset spreads utilized in the model suggest this will be a temporary reprieve.
Owners of ULTA, GPC & KMX should examine whether it is worth holding these stocks, as the position is rapidly deteriorating in those names.
Our asset allocation is today 80% TLT and 20% SPY. The monthly model will probably give us the sell signal at month end, but we never anticipate.