Despite the generally positive tone of global economic news the markets are now looking for any excuse to go down so longs are likely to have some rough going for a while.
The current buzz in the risk world concerns finding non-equity and non-fixed income alternatives.
Almost 2 years ago I proposed a number of such mini-portfolios and today I dredge up a simple 3 ETF input model based on oil and gas...XLE, USO and UNG. A thinking person may immediately conclude that this is a dismal portfolio fraught with risk and you would be right.
However, if we apply our MSD model with the short term momentum mode turned on and a top 2 sort we get the following results. Note the disparate values of the stops based on an M1 run for each input...there's considerable variance here to reflect the intrinsic volatility in each input.
Over the weekend we'll explore this model in greater detail on Mosaic Insight.
