“Ludo” by Cirque Du Soleil at Vidanta World, Nuevo Vallarta, Mexico.
US Equities took a ~2.2% hit this week so we’ll take a look at how the Dirac Portfolio performed as it focusses on investing in the sectors of this market that are showing the strongest relative strength.
The current analysis sheet looks like this:
with momentum Buy recommendations for XLE (Energy) and XLK (Technology) and a Mean Reversion Buy recommendation for XLF (Financials). As reported last week, XLU (Utilities) dropped to a Sell signal last Friday (20 March) so was sold out of the portfolio on Tuesday with a small (~$108) profit. At the same time a new position was opened in XLF (Financials) and additional shares were added to the existing position in XLK (Technology). Dividends were picked up for XLE, XLK and XLU:
Current holdings look like this:
or, roughly balanced between the 3 ETFs held in the portfolio. I am still a little nervous about being 100% invested in only a few ETFs with no diversification outside of the US markets so I will continue to monitor the situation.
Performance of the portfolio to date looks like this:
which, although in a small draw-down, is performing significantly better than the broader US market even though lacking diversification outside of the US equity space. The portfolio is ~75% invested.
If we look at where we might go from here, XLE (Energy) remains by far the strongest sector but XLK (Technology) is showing signs of weakening both in terms of momentum and acceleration – so will be monitored.
XLF is a mean reversion (bottom fishing) selection that is looking ok for now – but also needs watching for any reversals in direction of momentum and/or acceleration.:
Again, the portfolio hedge (not an official part of this portfolio) is comfortably protecting the portfolio right now:
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I am watching XLB (Materials) for a potential buying opportunity.
I have purchased 402 shares of XLB for this account. I am now close to 100% invested.
It has been a day to scrample a bit. I have sold a portion (70 Shares) of my holdings in XLE to lock in partial profits. A Sell signal was generated but I am not convinced that the bullish Energy trend is finished – so I am waiting a little before closing the remainder of the position.
Buy signals were also generated for XLI (Industrials) and XLV (Health) so I purchased 50 shares in each as an initial step in the waters. I will balance better when the Energy situation is, maybe, a little clearer.
With a Sell signal for Technology (XLK) I have sold out of this position.