Birds of Paradise
It was a tough week in the US equity markets as nervousness around the potential impacts of the war with Iran continues:
The SPX (S&P 500 Index) continues it’s downward trend and lost ~2.2% in value over the past week and remains at the lower boundary of it’s current trend channel. US equities were also the poorest performing major asset class of the week with Commodities continuing to lead:
Current analysis shows only TLT (US Treasuries) with a Buy recommendation and Commodities dropping to a Hold recommendation:
VNQ (US Real Estate) flipped to a Sell recommendation this week and was sold out of the Darwin Portfolio on Tuesday (after payment of the quarterly Dividend), at which time additional shares of DJP were purchased so as to better “balance” current holdings:
that now look like this:
or cautiously only ~50% invested.
DJP (Commodities), while still remaining strong in terms of long term momentum (blue line, left-hand axis) is weakening and heading in the direction of a cross-over of it’s Wilder moving average (brown line). Should this occur, in conjunction with a negative acceleration reading (green line – right hand axis) that is already triggered, even though momentum might still be positive, this would be a signal to Sell.
TLT is under-allocated so I may add to this position should I see a little more strength in the shorter-term MACD and RSI indicators (analysis screenshot above).
Current performance of the Darwin Portfolio, to date, looks like this:
where diversification, outside of US markets, has helped limit losses – particularly in the last week.
Note that this portfolio is now about Beta Neutral relative to SPY (analysis screenshot) – and I am still holding this hedge position (although not officially a part of this portfolio):
showing a current (unrealized) profit of ~$2,300 – that is close to covering the draw-down over the past month.
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I have just purchased an additional 175 shares of TLT for this portfolio. This “balances” the allocations in the 2 ETFs held and leaves a similar amount in Cash for another ETF if the opportunity arises.
I am watching International Equities (SCHF and EEM) for possible entries.
I have purchased 800 shares of SCHF (Developed Markets Equities) for this portfolio. I have a Sell signal on DJP (Commodities) but am waiting to see what happens over the next couple of days before selling.