The Trend Asset Allocation Model is an asset allocation model that applies trend following principles based on the inputs of global stock and commodity price. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can bsoe found here.
My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.
The latest signals of each model are as follows:
- Ultimate market timing model: Buy equities*
- Trend Model signal: Neutral*
- Trading model: Neutral*
Update schedule: I generally update model readings on my site on weekends and tweet mid-week observations at @humblestudent. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.
Subscribers can access the latest signal in real-time here.
A reversal bottomLast week, I lamented that the stock market appeared to be fearful, but not panicked. Be careful what you wish for, you might just get it.
On Wednesday, the S&P 500 violated a key neckline support level of an apparent head and shoulder pattern. On Thursday, the Russian Army crossed into Ukrainian territory and conducted what Putin called a "special military operation". Global markets adopted a risk-off tone and S&P 500 futures were down -2.5% overnight. The index opened deeply in the red but recovered strongly on the day on high volume to form a classic reversal bottom.
If war is what it took, I'll never ask the market gods for panic again.
The full post can be found here.
