Sunday, November 10, 2013

Weekly Update..11.10.13

Volatility is the name of the game as the SPY whipsaws up and down 100+ points on a daily basis.
Our safety net of CASH left some money on the table Friday as the markets surged closer to the DOW 16,000 target but technical overbought signals are widely in evidence so we may see a pullback into options expiration and the end of this coming week.
Every pullback has been a buying opportunity as long as the markets continue to chug upwards.
The problem is the paradigm could change quickly and dramatically so investors should be content to follow the money management stops and not try to outguess the markets.

On the Small World model its clear that the SPY is the place to be as foreign markets come under weakness.  How long this disconnect can continue remains to be seen. Based on a top 2 sort the model remains in cash.
The SCHWAB no fee model is faring about the same although the model is more bullish than Small World. The low volatility version of SPY (SPLV) has been the recent top ranked using a top 2 sort, and although the short term have not kept pace with SPY, the 3 month net returns shine and the frequency of trading has been minimal.
Over on the beta version of the XIV trader the signals are distinctly bullish....except on the short term there's that note of caution...basically reflecting the overbought situation of the XIV, not necessarily the SPY.
More on the nuances of the new XIV model next week as we approach release of this volatility trader.