Wednesday, February 15, 2012
Stocks are struggling with conflicting headlines this morning. Initially it was positive that a central bank governor in China reiterated that the Chinese remain committed to supporting the Eurozone and that they would do more if the Europeans would provide the proper incentive. However, the reports that Eurozone Finance Ministers are considering delaying approval of the Greek bailout package until after the April elections in Greece caused traders to pull in the reins.
The bottom line is that stocks appear to be consolidating the recent gains during this options-expiration week. So, some volatility back and forth is to be expected.
Now let’s turn to today’s model readings…
The Weekly Timing Model is the primary driver of our work and attempts to “call” the direction of the market for the week based on the strength of the model’s indicators. The overall model reading stayed in the Neutral zone again this week. This tells us to hold current positions and to lean toward the sidelines when in doubt.
The Daily Timing Model is dominated by trend and momentum indicators and is designed primarily to keep us in line with the overall trend of the market between weekly signals. While stocks are mixed this morning, the Daily Timing model remains in the Moderately Positive zone this morning.
Have a great day...
David Moenning
Main: 630-250-4700
Direct: 303-670-9761
HCM's Active Risk Management Model Readings
Our active risk management strategy, which is designed to keep us in tune with the market's primary intermediate-term trends, employs two different models: Weekly and Daily. This multi-model strategy is our primary guide to risk management and exposure decisions.
We start each week with the inputs from our weekly model (which itself is comprised of 7 model-of-models and 3 key trend indicators). From there, we let our Daily Model (which is primarily trend and momentum oriented) keep us alert to changes in the market's trend.
For more on the development of our active risk management system, feel free to consult our Research Report: Developing an Active Management System for the U.S. Stock Market
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In an effort to stay alert to changes in the market's primary trend, we monitor the internals of the market on a short-term basis via our Daily Market Model. The Daily Model is designed to keep us in line with the overall trend of the market between weekly signals.
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The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM’s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
© Copyright 2012 Heritage Capital Management, Inc. All rights reserved.
Posted on 2/15/2012 at 11:21 AM
