Rudesheim, Germany
Despite Friday’s pullback it was another positive week for US equities with the S&P 500 up ~2.6% on the week:
Tentatively, it looks as though prices may have moved out of the downtrend channel that they have been in for the past ~6 months – but we might still see resistance at ~400 since this is the 100% extension area from the March highs (based on the prior downtrend from the beginning of the Year (Jan)). If the uptrend continues this would place the pivot low at ~360, or the 161.8% Fibonacci (golden ratio) extension level. If we do not see a breakout above 400 we might well see a re-test of this (support) level. So, the placement of the D pivot point is still not confirmed and 380 (at the 127% Fibonacci extension level and bottom of the tentative new up-channel) is another potential support area.
In terms of performance:
most asset classes showed positive returns over the past week with Commodities being the only loser. We have been selling shares in DBC over the past few weeks as the different tranches have been reviewed – this helps smooth out the impact of timing (review date) luck.
Graphically, Rutherford performance looks like this:
with current holdings in the portfolio as shown in the following screenshot:
Tranche 1 (the focus of this week’s review) is holding a ~35% allocation to DBC with the balance in Cash.
Checking current rankings and recommendations from the BHS model we see the following picture:
i.e. still no Buy recommendations but a lot more positive green short-term HA signals.
So, let’s take a look at the rotation graphs:
that are still not showing strong longer term strength with no assets showing a positive rotation having relative longer-term momentum greater than the benchmark AOR Fund. A check of the HA Charts shows promising shorter term strength in VNQ, VTI so it will be interesting to see if we get follow-through into the top right quadrant. Over the past few weeks we have added shares of TLT to the portfolio and, although this asset class has performed well and continues to show reasonable short-term strength it is falling behind a little in terms of relative longer term strength (right to left movement).
Based on the above information I am going to sell holdings in DBC in this Tranche 1 and use the cash to buy a few shares (~25% allocation) in the benchmark AOR fund:
This will leave me with ~75% of available funds in Cash to invest when we finally see some new Buy recommendations. A little over 50% of the total portfolio value will then be sitting in Cash.
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