Rutherford Portfolio Review (Tranche 3): 1 July 2022

Please Leave Your Shoes at the Door – Shoes on the Danube river, Budapest

A 2.3% loss for US equities this week as prices stay within the downtrend channel that we’ve been in for the past 3 months:

Price closed just within the weekly Expected Range after closing below the range on Thursday. Implied Volatility remains a little over 30% but only at ~50% of it’s 6-month range.

In terms of relative performance, US equities fell towards the bottom of the list with Bonds outperforming other asset classes on the week:

With Commodities being the worst performing asset this week, and with the Rutherford Portfolio being heavily represented by DBC, performance suffered a little relative to the benchmark AOR Fund:

Current holdings in Tranche 3 (the focus of this week’s review) are VNQ (US Real Estate), DBC (Commodities), GLD (Gold) and AOR (benchmark equity/bond fund):

So, let’s see what the BHS model is recommending:

where we see Sell recommendations for all assets.

If we take a look at the rotation graphs (with DBC excluded so as to provide an easier view of the other assets):

we see weakness (top right to bottom left rotations) in many of the asset classes. [DBC shows similar behavior – but further to the right – i.e. at higher long-term relative momentum.] In the upper left quadrant we see improvements in TLT, PCY and VWO.

Checking recommendations from a rotation model:

we still see only Sell recommendations. As for the BHS sheet we see positive short term strength in the HA signals for VNQ and TLT – so let’s take a look at the HA chart for TLT:

that looks as attractive as anything else at this point in time. Consequently, I will hold on to current holdings in VNQ and DBC and sell holdings in GLD and 100 shares of AOR in Tranche 3 and I will use the cash generated to buy 80 shares (50% Tranche allocation) in TLT:

David

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