The Trend Asset Allocation Model is an asset allocation model that applies trend following principles based on the inputs of global stock and commodity price. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.
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My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.
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The latest signals of each model are as follows:
- Ultimate market timing model: Buy equities*
- Trend Model signal: Bullish*
- Trading model: Bullish*
Update schedule: I generally update model readings on my site on weekends and tweet mid-week observations at @humblestudent. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.
Subscribers can access the latest signal in real-time here.
A magazine cover buy signal?Investors and traders who stepped up and bought into the market panic last Monday profited handsomely when stock prices staged a relief rally. Another panic opportunity may be presenting itself, this time in the energy sector.
Historically, The Economist magazine covers have been excellent contrarian market signals (see What a bond market rally could mean for your investments). The Economist may have done it again this week with a focus on the global warming effects of heat waves in North American and floods in Germany.
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Notwithstanding the public policy issues, which are beyond my pay grade, here is what it could mean for selected energy equities.
The full post can be found here.