The Daily Decision for 3.17.17 - Sideways Is The New...


The Early Take on the Market:
There is a fair amount of activity in the early going on this St. Patty's day. To start, there is the latest out of Washington which includes Trump's meeting with Angela Merkel and Secretary of State Rex Tillerson's comments about military action against North Korea being "on the table." In addition, Treasury Secretary Steven Mnuchin is making headlines for the stance on countries that devalue their currencies in order to gain an edge in trade. Next up, there is the latest on the BREXIT. U.K. Prime Minister Theresa May is walking a tight rope right now in promoting that Britain "take back control" while encouraging the Scots to stay in their seats. And then there is oil. While stocks rallied on Wednesday in response to the idea of the Fed staying on course (and maybe even fighting some inflation along the way), stocks struggled a bit on Thursday due in large part (in my opinion, of course) to oil's decline. However, Saudi's Energy Minister Khalid Al-Falih said this morning that OPEC could cut production further if global supply numbers remain above the five-year average. In response, crude futures are moving slightly higher so far this morning. As for the market, stocks may be embarking on yet another sideways consolidation phase. Given that the pattern has been for stocks to rally, then pause for a couple months before resuming the march higher, this would seem to make sense here.

Turning to our portfolio...

LEADERS Model: No change. The LEADERS model currently holds the top rated sectors of the stock market: Financials, Health Care, and Technology. P.S. The LEADERS model continues to outperform the S&P 500. YTD, the LEADERS model is up 8.1% vs. 6.5% for the S&P.

CORE EXPOSURE Model: Today, the CORE model's exposure is a smidge below the model's recommended level at 90% vs. 100%. As such, we will continue to lean bullish at this time.

TRADING Model: We continue to hold EEM for a trade and are feeling MUCH better about the position after the recent rally to new cycle highs.

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.



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.



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 Strong Buy
Technology Select Sector SPDR 33.4% XLK 33.4% 12.1.16 $46.64 Buy
Health Care Select Sector SPDR 33.3% XLV 33.3% 2.27.16 $75.05 Buy
The CORE EXPOSURE Model

Position
Target
Exposure
ETF
Symbol
% of
Model
Date
Purchased
Purchase
Price
Current
Rating
ProShares UltraPro S&P (3X) 110% UPRO 37% 12.1.16 $80.79 Buy
The TRADING Model

Position
Target
Exposure
ETF
Symbol
% of
Model
Date
Purchased
Purchase
Price
Current
Rating
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



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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 Mar 17, 2017 — 9:03 AM
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