After trading in a 300 point range for the past 2 months, and starting the New Year with a push to new all-time highs is the first half hour of trading on Monday it was all downhill from there, sparked by hawkish comments from Fed Chair Powell on Wednesday, with US equities ending the week ~2.5% lower than last week’s close:
SPX 4600 looks like a strong support area – but we’ll have to wait and see.
Compared with the performance of other asset classes:
this falls in the middle of the pack – but only Commodities showed gains on the week – presumably due to continuing strength in the Oil sector (https://itawealth.com/hindsight-is-2021-a-year-end-retrospective-and-lessons-for-2022/).
Performance of the Rutherford Portfolio:
reflected this overall weakness in the markets based on current holdings:
In Tranche 3 (the focus of this week’s review) we are invested in TLT, GLD and the benchmark AOR Fund with minor holdings in DBC and VNQ and ~$5,000 in Cash.
Current rankings and recommendations from the BHS model look like this:
with a Buy recommendation for DBC and Hold recommendations for VTI, VNQ and GLD. AOR is a discretionary Hold? recommendation (no strong reason to Sell). TLT is a recommended Sell.
Checking the rotation graphs:
we see the significant movement of DBC and clockwise rotation towards the desirable top right quadrant. Everything else is looking pretty weak.
Recommendations from a rotation model look like this:
with only VNQ showing as a Buy and TLT recommended as a Sell.
Based on the above, I will adjust my positions in Tranche 3 as follows:
i.e. I will sell 32 shares in TLT and Buy 41 shares in VNQ and 220 shares in DBC.