Tactical Trend, Q4 2017

Author: Matthew C. McAleer, Post Date: January 2, 2018
image_pdfimage_print

Recognizing strengths and weaknesses among primary asset classes is the core goal of our Tactical Trend strategy. The strategy seeks to identify relative strength and trend strength in an attempt to allocate capital to the strongest asset classes while underweighting or eliminating exposure to the weaker asset classes. We perform rigorous surveillance on the following asset classes: US equities, international equities, fixed-income, commodities, and cash.  A mix of these asset classes make up 100% of Tactical Trend’s total allocation at any given point in time.

Year-to-date our allocation has not shifted much, with both domestic and international equities trading well and continuing to exhibit asset class leadership. As previously noted, political and global headlines may dominate the newswires, but equity markets and prices have enjoyed a steady bid, with pullbacks being historically shallow. In our analysis, we try to spend twice as much research time on the opposite side of our trade as we do on our position. So what currently bothers us? Most of our concern in Tactical Trend revolves around our secondary indicators, which are sentiment-driven. The 4th-quarter bullish confidence numbers among both individual investors and professional money managers have continued to rise and have reached levels that caused the market to pause or correct in the past. This situation can also be viewed through the lens of the very low readings of the CBOE put/call ratio, which tells us that call buyers are dominating the action. We will continue to monitor and analyze these indicators.

US Equity: (63%) Solid broad market exposure through QQQ & RSP. Bullish moves in Transports, Basic Materials, and Consumer Discretionary.

International Equity: (30%) Primary exposure in Asia with smaller additions in Latin America. Japan and our emerging-market positions have had a strong year but have shown some recent waning of momentum.

Fixed Income: (0%) No position at this time

Commodities: (0%) No positions at this time

Cash: (7%)

Matthew C. McAleer
Managing Director & Portfolio Manager
Email | Bio


Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.

Sign up for our FREE Cumberland Market Commentaries

Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.

cumber map
Cumberland Advisors® is registered with the SEC under the Investment Advisers Act of 1940. All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services. Such an offer can only be made in the states where Cumberland Advisors is either registered or is a Notice Filer or where an exemption from such registration or filing is available. New accounts will not be accepted unless and until all local regulations have been satisfied. This presentation does not purport to be a complete description of our performance or investment services. Please feel free to forward our commentaries (with proper attribution) to others who may be interested. It is not our intention to state or imply in any manner that past results and profitability is an indication of future performance. All material presented is compiled from sources believed to be reliable. However, accuracy cannot be guaranteed.
Loading...