Even in a shortened 4-day trading week US equities managed to gain ~4% from last week’s close:
The big surprise came on Friday when we gapped up on the Open and kept going from there. In the above figure I have drawn a tentative breakout channel from the recent downtrend. There is still a lot of potential resistance in this area including the 50- and 100-day simple moving averages (heavy dashed lines). We’ll see where we go from here.
Compared to the performance of other asset classes:
US equities sits near the top of the list with Bonds showing weakness.
In terms of the implications for the Rutherford Portfolio:
we see that we are still matching the performance of the benchmark AOR Fund.
Current holdings are looking like this:
with Tranche 3 (the focus of this weeks review) holding shares in VTI, VNQ, TLT and AOR.
Checking current rankings and recommendations from the BHS model:
we see Hold recommendations for VTI and AOR and Sell recommendations for all other ETFs. Surprisingly, even after a bullish week in the markets we are still not seeing significant positivity in the short-term HA signals.
Checking the rotation graphs:
we see VTI and VNQ in the favorable top right quadrant but these seem to be rolling over and weakening.
Recommendations from the Rotation Model look like this:
with Sell recommendations for all assets. The significant observation here is that the 13-day EMA is lying below the 49-day EMA for all ETFs (X/O Column) that will automatically generate a Sell signal for this Model.
Although this is a little anti-intuitive based on last week’s strength I will continue to follow the recommendations of this model and move to Cash:
This will leave me holding ~50% in Cash.