As we look forward to the coming week, what recommendations come out of the Baker’s Dozen analysis. Follow along as we examine the following Tranche Momentum Model (TMM) analysis. Keep in mind that the Baker’s Dozen is a fictitious portfolio with no real money invested.
Tranche Momentum Recommendations: ETFs selected for the Baker’s Dozen include the “Rutherford 10” plus BIV, QQQ, and BRK-B. These last three might change from time to time for the Baker’s Dozen. In keeping with TMM analysis, sell GLD, TLT, or BIV since all rank below SHY based on performance. TLT and BIV also fail in that both are priced below their 195-Day Exponential Moving Averages. With the easy sell decisions out of the way, what ETFs are positioned to buy.
Ten (10) ETFs are potential buy candidates as this many are outperforming SHY. My eye is drawn to the Group column where VTI, RWX, and BRK-B are ranked either two or three, with one being the highest. Every security is showing all green for both Heikin-Ashi indicators. Do we limit our buy orders for these three or do we expand into the four rankings?
What to purchase comes down to what diversification one desires. DBC, QQQ, and VWO rank 1, 2, and 3 respectively. However, all three have a Group ranking of four (4). For maximum diversification, I’m inclined to buy shares in the top seven ranked ETFs as this will pick up RWX with a Group ranking of 2.