It was a quiet, holiday shortened, week in the markets with the S&P 500 Index drifting slightly higher by ~0.3% toward the all-time highs of 2 years ago of ~4800 in the SPX:
However, Santa could not pull us through the strong resistance at this level and we need to wonder whether he has turned around to head home.
The above chart shows 4 major trends over the past 2 years, although it might be argued that there are only 2 major trends since the last 2 trends to the right of the chart (in 2023) still lie within the 2 Standard Deviation bullish channel that began at the 2023 October lows. The trend channels drawn on the above chart are based on breakouts of the 1 Standard Deviation channels that investors concerned with risk and presevation of capital may be more focussed on.
Compared to the performance of other major asset classes last week:
US equities fared “average” with International equities and Real Estate all performing better.
Current holdings in the Rutherford Portfolio still look like this:
since I was, again, too pre-occupied with other things to find the time to make any adjustments. However, performance was still acceptable since the portfolio is well diversified and defensive in that 40% is still held in BIL (as a proxy for Cash):
Checking on the rotation graphs:
we see a continuation in the strength of a number of ETFs that are lying in the desirable top right quadrant but, maybe, with a warning that this strength is weakening or at least slowing down (downward vertical movement).
This week’s recommendations from the rotation model look like this:
with Buy recommendations for VNQ, RWX, TLT and PCY. It may be significant that none of these ETFs represent the equity markets.
Following the above recommendations, this week’s adjustments for Tranche 3 (the focus of this week’s review) look something like this:
with a rotation out of Cash (BIL) towards the recommended asset classes and the benchmark AOR Fund (since momentum suggests that AOR may perform better than holding excess funds in BIL after caculating the risk parity allocations to the other ETFs).
And so …. into 2024. Wishing all our ITA Wealth Management readers a Happy New Year and successful investing in 2024.