Over on the default T2 model the P6 has us in cash and, as with the X sector model, the likely short term move is down through the RSQ equity line.
The top 2 sort of the default model has not performed as well as the SPY in most of the short term metrics...which can be partially traced to the fact that 5 of the 11 ETFs have downslope RSQ lines. However, keep in mind that the default model is a market neutral portfolio so we should not be surprised at its sub par returns.
The best use of the T2 default is examining where bonds are relative to equities relative to SPY.
With SPY in the midpoint #6 slot we are seeing a non-trending market which is slightly skewed to the downside.
The somewhat odd behavior of XLE (energy), jumping back and forth between slots 4 and ,7 further emphasizes the stagnant nature of the markets.
Can we go higher?
The answer is a qualified yes but what we are seeing now is a market of individual stocks making substantial gains of losses, mostly due to earnings reports and projections.
For longer term investors seeking to avoid this volatility and uncertainty the current risk management signal continues to argue for CASH>
