Friday, December 21, 2012
NYAD and VTV View...12.21.12
The move to restrict our short term positions to IWM in the T2 model (noted yesterday) played out well today as IWM is only down .9%, while SPy is down 1.2 and the Qs are down a whopping 1.9%. We took a hit, yes, but so far its a modest one and we avoided compounding the error by being out of XLE and XLU, both also in the red today.
The VTV model was suggesting that today's slide had a high probability. The TrendX was dead on the zero line for the IWM/TLT pair...indicating a bad time to take on new IWM Longs, but more importantly, the VTV chart below the metrics panel had P3 and P6 divergent....a clear signal that momentum between the IWM/TLT pair had reached a "breaking point". Although all the other chart signals were in a confirming mode, this one was not and should have provided a caution to stand back from any new trades and/or provided a signal to go to cash until the P3 and P6 were once again in sync.