Bearish Conviction – Models Working Well
On the Sidelines? Market Giving You Chance To “Buy Low”
There are 468 different ETFs for investors to choose from when allocating capital. Our last two buys (made within the last week) were VXX and PSQ (RYAAX). On Friday, VXX was up 6.31%. PSQ was up 2.4%. Of the 468 options, VXX was the #2 performer on Friday; PSQ came in ranked #4. It illustrates the power of paying attention. It also is a good sign for CCM clients. The changes we made in Q1 this year are working very well. As we use the new CCM Market Risk Model, we are beginning to see how to best utilize it. Our future is bright.
Stocks could bounce next week, but the odds favor at least one more lower low before this correction is over. Consequently, we added to our hedges and cut back on our longs Friday. We have reduced our net risk exposure significantly in the last few weeks.
The market looks similar to early May 2012, a month that was not kind to investors. We will enter next week with an open mind and a defensive bias.
If you have been waiting to get back into this market, now is the time to get your account set up. If you have been in a heavy cash position, the market may be giving you an opportunity to “buy low” or enter at a more favorable risk/reward level. Most investors will now say, “See, I was right not getting back in”, and subsequently, they will miss the next turn up. It is important to break the cycle of “I missed the opportunity to get back in.” If you have questions, let us know – we are happy to help – Contact info CCM.
