The Daily Decision for 6.24.16


The Early Take:
The surprise vote for BREXIT has created a serious bout of volatility across all markets this morning. Stocks are down hard in Europe (5%-8%) and the U.S. market is following suit, albeit to a lesser degree from a percentage move standpoint. In short, THIS is why I've been holding off on following our model's lead to increase equity exposure this week - I didn't want to add exposure into the potential for massive volatility. And with the model now telling me to take a little off the table today, I'm likely to heed the guidance. However, as we've learned over the last 7 years, global banks stand at the ready to lend a hand when things get dicey and as such, ALL dips have actually been buying opportunities. Thus, I'll be looking for the mean reversion components of our DD model to do their thing next week. But for today, the plan is to lighten up a little and see how we close.


The Daily Decision Model:
About: The Daily Decision Main Model is designed for the vast majority of investors. If you want a professional, disciplined approach to managing the risk of the U.S. stock market - this is it. One decision. Once a day. Done.


Current Daily Decision Position: 60% Long (20% UPRO - ProShares UltraPro S&P 500)
Today's Early Model Reading*: 52% Long (17.3% UPRO - ProShares UltraPro S&P 500)


*Today's Model Reading represents the "early read" of our models. However, please note that model readings often change during the trading session and our managers ultimately decide when/if to make changes to our holdings. We will always send a trade alert (via SMS text and/or email) BEFORE changes are made to our positions.


New to the Daily Decisions?
Our current "New Member Rating" is: Buy


Additional Daily Decision Trading Models/Systems:
In an effort to provide additional research and trading guidance for a wide variety of members, we provide the daily readings of 5 additional trading systems.


How To Use: To clarify, the Main Model (shown above) is the primary model for the Daily Decision service. However, members can use any or all of the systems below to customize their approach or to focus on a specific style of trading or time-frame.


The Timing Models (Short-Term):
About: These are shorter-term all-in/all-out timing models designed to stay on the correct side of the market's trends. The positions of these models are updated in real-time via trade alerts and the Marketfy trading system.
Today's Positions:
DD Hybrid Model:
0% Long (0% UPRO - ProShares UltraPro S&P 500)
DD Aggressive Model: 0% Long (0% UPRO - ProShares UltraPro S&P 500)


The Mean Reversion Model (Short-Term):
About: The Mean Reversion Model is designed to indicate when conditions are ripe for the market to "go the other way" from the current trend.
Today's Position: 0% Long (0% UPRO - ProShares UltraPro S&P 500)


The Graduated Exposure System (Intermediate-Term):
About: The Graduated Exposure System is designed to keep overall exposure to market risk in line with the intermediate-term"state of the market environment.
Today's Position: 35% Long (11.67% UPRO - ProShares UltraPro S&P 500)


The "Desert Island" System (Long-Term):
About: The Desert Island Model is a long-term indicator designed to tell us which team is in control of the game. The primary objective of this model is to avoid high risk, bear market environments.
Today's Position: 100% Long (33.34% UPRO - ProShares UltraPro S&P 500)


Current Market Environment Model Reading:

The Market Environment Model is designed to indicate the current "state of the market" in terms of technical health and the market's internal strength. To clarify, this is NOT a trading system. We use the model to help us identify the proper trading strategy to use in a given environment.


Daily Decision Performance:

Below is a summary of the live and backtested returns of strategies provided in the Daily Decisions service.

Before we ever invest our hard earned capital in a market strategy, we believe it is important to thoroughly test the system in different market environments. While all system tests have flaws, the idea is that a backtest can provide us with (1) proof of concept and (2) an indication of what we might be able to expect from the system in different market environments. And from a longer-term standpoint, we are pleased with the way the systems perform in most market environments.

The Daily Decision Systems
Performance Results
(Updated Weekly on Mondays)



Period

The Daily
Decision

Model(1)

DD Timing
Hybrid

Model(2)

DD Timing
Aggressive

Model(2)

Graduated
Exposure
Model(3)

Desert
Island
Model(3)


S&P 500
Index
1997 +42.85% +46.08% +97.09% +43.36% +40.39% +31.01%
1998 +51.12% +85.70% +170.47% +41.31% +38.08% +26.67%
1999 +17.91% +32.36% +70.39% +8.22% +17.35% +19.53%
2000 +6.51% +30.93% +63.29% -5.92% +2.13% -10.14%
2001 +21.74% +30.64% +64.94% +14.02% +22.93% -13.04%
2002 +13.87% +21.52% +40.48% +14.45% +8.59% -23.37%
2003 +48.80% +56.23% +104.53% +28.30% +62.09% +26.38%
2004 +15.40% +11.81% +26.86% +9.20% +23.08% +8.99%
2005 +5.74% +5.71% +7.26% +3.62% +7.62% +3.00%
2006 +18.89% +26.10% +47.43% +5.55% +26.05% +13.62%
2007 +15.67% +23.91% +46.63% +3.30% +21.35% +3.53%
2008 +50.06% +44.62% +92.78% +15.29% +21.35% -38.49%
2009 +66.50% +204.78% +161.00% +47.77% +70.84% +23.45%
2010 +30.37% +33.43% +61.20% +26.32% +27.32% +12.78%
2011 +20.47% -7.42% -26.80% +3.38% +21.45% -0.00%
2012 +27.83% +8.14% +16.47% +20.33% +29.58% +13.41%
2013 +36.38% +27.27% +44.34% +37.28% +38.45% +29.60%
2014 +11.19% +3.54% -1.14% +7.43% +16.83% +11.93%
2015 -4.79% -12.70% -16.00% -3.04% -1.37% -0.73%
2016 -1.13% +0.48% +0.48% +0.58% -3.63% +1.33%

Compound Average
Annual Return:

(1997 - 2015)
+24.68%
Per Year
+27.62%
Per Year
+50.25%
Per Year
+15.83%
Per Year
+30.20%
Per Year
+5.45%
Per Year
(1) The Daily Decision Model (aka the "Main Model") Components: 40% Desert Island System, 35% Graduated Exposure System, 25% DD Hybrid Trading System. Live Returns from December 2015 forward, backtested results prior
(2) Live Returns from January 2009 forward, backtested results prior
(3) Live Returns from January 2015 forward, backtested results prior

Have a great day!

David D. Moenning
Founder, StateoftheMarkets.com
President, Heritage Capital Research



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Daily Decision Links:

Daily Decision Resource Page

New Member Ratings Explained

Market Environment Model Explained

Daily Decision Model Portfolios Explained

Interactive Performance Details

Backtested Performance Information

Introduc

Posted to Daily Decisions Service on Jun 24, 2016 — 9:06 AM
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