Weekly Model Reading
Stocks finished higher for the ninth time in the last twelve weeks as the steady march higher that began in mid-December shows no signs of letting up. From a big picture standpoint, it appears that the improving sentiment toward the bailout deal for Greece as well as another round of better-than expected U.S. economic data provided the fuel the bulls needed to propel the major indices to multi-year highs.
Moving on to this week’s reading of the Weekly Timing Model...
To review, the Weekly Timing Model attempts to "call" the direction of the action for the coming week via the historical readings of 10 models-of-models and more than 50 indicators. There has been no change to the model components this week. All three of our trend models remain positive while the seasonality, sentiment, and economic indicators are now negative. Thus, the overall weekly model reading remains in the Neutral zone. This tells us that to lean toward the sidelines when in doubt this week.
So, with a decent trade on the books at the present time and the weekly model in a neutral mode, we will be looking to the Daily Timing Model for direction if the market’s trend begins to falter.
Finally, note that our active risk management system described in the Daily and Weekly Model reports are utlized in the following HCM management programs: Flexible US Growth, Flexible Global Growth, and several of the VA programs. In addition, the weekly model is utilized for hedging purposes in the Top Stocks and Top 25 equity models.
Have a great day and enjoy the rest of your weekend...
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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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 2/20/2012 at 12:48 PM
