Weekly Timing Signal: Buy
Sneak Peek: The Daily Decision Service
On occasion, TSP allows all visitors to "sneak a peek" inside one of our portfolios. This is not a promotional piece on the service, but rather a live look into the service's latest report to subscribers. Below is this week's report on the weekly timing signal reading.
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TSP Daily Decision Service Members:
Although the macro view may not be a pretty picture at the moment, the recent technical action in the market on Friday was encouraging. We like the fact that the market indices successfully tested the Flash Crash lows and then reversed higher. In short, after a decline of -12% on a closing basis in less than a month, one could argue that it just might be the bulls’ turn to run with the ball for a bit.
Stocks are oversold and sentiment has become pretty darn negative, which in our world, means that it is time to start thinking about going the other way. As we pointed out in Friday’s report, both our sentiment and overbought/sold indicators are currently waving their arms trying to get our attention.
So, while we can certainly see the negative macro issues, as traders, we are trained to look for opportunities. And in short, an opportunity might just be upon us.
Turning to our models, our weekly timing model, which attempts to “call” the direction of the action for the coming week, has flashed a Buy Signal. Thus, we will go into the week looking for an opportunity to go back to the long side for a trade.
Please be aware that this means a Trade Alert is likely in the near-term. And in terms of equity selection, it is currently a toss-up as to whether we will use the Mid- or Small-cap index-based ETF’s. Currently, the Mid-caps have the edge on a chart basis, but the liquidity is better in the leveraged small-cap ETF’s.
As always, we will send a specific Trade Alert BEFORE we make a move.
Enjoy the remainder of your weekend,
Dave Moenning
Founder TopStockPortfolios.com
Below is the Weekly Timing Signal reading for the week:
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Current Positions
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Main Model: 100% Cash
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Agressive Model: 100% SDS (ProShares UltraShort S&P 500)
- Hybrid Model: 100% Cash
Daily Decision Performance Results
Below are the performance results of our model portfolios:
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Please see important disclosures on the inherent limitations of model portfolio results. Past performance is not a guarantee of future results.
S&P 500 Last 12 months
About the Weekly Timing Signal
The Daily Decision Service employs two different "Timing Models" in order to help us make the decision of where (and how much) to be invested. We start each week with our "Weekly Timing Signal" which is updated over the weekend (after the computers have had a chance to crunch the numbers from hundreds of indicators). In short, the weekly signal is designed to anticipate the likely direction of the stock market during the coming week.
While the weekly signal has a stellar long-term record, the stock market has a tendency to have a mind of its own and to react swiftly to news. Thus, we depend on our Daily Model Indicators during the week to ensure that we stay in tune with the trend of the market at all times.
Long Term Performance Testing: Weekly Timing Signal
Before we ever go "live" with the trading strategy, we insist that the management system be thoroughly tested - preferably in good markets, bad markets and everything in between. So, before we introduced our Daily Decision service, we asked the largest institutional research firm in the country to conduct an independent test of the system. Although no backtest is ever perfect (far from it!), what we're looking for is an indication of how the system could perform in
