The Daily Decision Trading Update for 2.13.17


The Early Take on the Market:
Oil demand, foreign selling of U.S. Treasury bonds, the charts of stock market indices and Janet Yellen's upcoming testimony appear to be the focal points in the early going on this fine Monday morning. With most everyone on the planet expecting rates to rise in the U.S. this year, even the world's biggest buyers of U.S. Gov't Bonds are taking a step back. For example, according to Japan's Ministry of Finance, the largest holder of Treasuries pulled their stakes in U.S. Treasuries in December by the most in almost four years. And it isn't just Japan, as worries over Trump policies as well as increasing inflation expectations appear to be the driving force of the move away from the $13.9 trillion U.S. treasury market. Turning to the stock market, the major indices appear ready to open higher to start the week. The question of the day is if the move is sustainable with Janet Yellen set to testify before Congress twice this week. But for now, the trend is clearly a friend to stock market investors.

Turning to our portfolio...

LEADERS Model: Since it is Monday, we will review market leadership. However, based on the recent action in the market, we don't expect to see any changes.

CORE EXPOSURE Model: Our current exposure continues to be a bit below the recommended exposure for the model at 75% vs. 90%. We will continue to look for opportunities to add exposure.

TRADING Model: We currently hold two "momentum breakout trades" in the materials sector and the emerging markets.

How To Use the DDTS Models: The DDTS is designed to be a modern, multi-strategy, risk-managed portfolio. Thus, the overall portfolio is a combination of all 3 models. However, we trade the models independently to allow for the use of the models on a standalone basis. If we were to choose just one model to follow, it would be the LEADERS for growth orientation, the CORE for a more conservative, risk managed approach, and the TRADING model for an opportunistic "value-add" approach.

Note: The TRADING model attempts to add value to the portfolio through what are perceived to be low-risk trading opportunities and is not intended to be a "market timing" strategy.



Daily Decision Trading Service
Current Portfolio Summary
The LEADERS Model

Position
Target
Exposure
ETF
Symbol
% of
Model
Date
Purchased
Purchase
Price
Current
Rating
Financials Select Sector SPDR 33.3% XLF 33.3% 12.1.16 $22.89 Buy
Technology Select Sector SPDR 33.4% XLK 33.4% 12.1.16 $46.64 Hold
Industrials Select Sector SPDR 33.3% XLI 33.3% 12.1.16 $62.82 Buy
The CORE EXPOSURE Model

Position
Target
Exposure
ETF
Symbol
% of
Model
Date
Purchased
Purchase
Price
Current
Rating
ProShares UltraPro S&P (3X) 75.0% UPRO 25% 12.1.16 $78.74 Hold
The TRADING Model

Position
Target
Exposure
ETF
Symbol
% of
Model
Date
Purchased
Purchase
Price
Current
Rating
Materials Select Sector SPDR 33.0% XLB 33.0% 1.24.17 $51.95 Strong Buy
iShares Emerging Markets 20.0% EEM 20.0% 1.25.17 $37.43 Hold



Target Exposure Explained
This column is the goal percentage in terms of the overall exposure for the model. This is shown due to the fact that we utilize leveraged ETFs.

% of Model Explained
The number shown in this column represents the percentage of the the model this position represents.

Current Rating Explained
This is our rating for the day. The Current Rating tells you what action we would take if we did not currently hold the position. A "Buy" rating means we would be willing to purchase the position at current prices. A "Strong Buy" suggests this would be our first choice to buy. A "Hold" rating indicates we would not make new purchases at current levels. And a "Sell" rating indicates we will likely exit the position in the near-term.

Positions Can Change
Positions often change during the trading session. Remember that we will send a Trade Alert via SMS Text Message and/or Email BEFORE we ever make a move in the models.

About the Daily Decision Trading Service
Our easy-to-follow Daily Decision Trading Service is a modern, pro-level, multi-strategy, multi-manager approach that is made up of three models:

- The CORE Model
- The LEADERS Model
- The TRADING Model


We start with THE CORE Model holdings. This risk-managed position is designed to provide the appropriate level of exposure to the U.S. stock market given the current risk/reward environment and makes up one-third of the overall DDTS portfolio. The goal of the CORE is to give us "the forest" and to stay in tune with the market's big, important moves. And when the bears come to call, the CORE is designed to take defensive measures by moving into capital preservation mode.

Next, we allocate one-third of the overall DDTS portfolio to THE LEADERS Model. This model focuses on the top sectors in the market. Because in short, when technology, biotech, the banks etc., start to heat up, we want to make sure we have an overweighted exposure to the market leaders.

And finally, one-third of the DDTS portfolio consists of THE TRADING Model. This model seeks trading opportunities based on swing-trading and mean-reversion strategies. These are designed to be short-term positions and the primary goal is simple: to add value via an opportunistic approach to trading!

When combined, the three models represent a modern, multi-strategy, risk-managed portfolio.

Wishing You All The Best in Your Investing Endeavors!

The Front Range Trading Team



Daily Decision Links:
Daily Decision Resource Page
Interactive Performance Details


NOT INVESTMENT ADVICE. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Investors should always consult an investment professional before making any investment.

Posted to Daily Decision Trading Se... on Feb 13, 2017 — 9:02 AM
Comments on this post have been disabled by the Maven.