S&P 500 Unchanged for the Week

S&P 500 Unchanged for the Week

Posted on April 01, 2014

Canterbury Portfolio Thermostat – Weekly Update 03/31/2014

Market State 2 (12 trading days) - Long-term: Bullish; Short-term: Neutral/Bearish

Canterbury Volatility Index is at CVI = 54: The CVI was down 2 points. Volatility remains stable and low. A volatility reading below CVI 75 is considered to be a low risk environment.

Overbought/Oversold indicator:
Our overbought/oversold indicator closed Friday at 59% oversold (short term Neutral). It is interesting that the indicator remained at the exact same level as the previous week.

Market Comment:
The S&P 500 was pretty much flat last week, down - 0.48%. We are seeing a definite rotation out of growth equities. The Dow holds more value stocks than growth and was up about 25 points for the week. The Portfolio Thermostat has been rotating to more defensive positions throughout the first quarter.

A move higher is likely this week. The last days of the ending quarter and first days of the new quarter have tended to be up. This has been the case since the beginning of 2012. Assuming that the market does advance, it is important to see growth begin to outperform value.

Bonds had a strong January and have been mostly holding on to their gains through February and March. A slow growth economy is indicated when bonds are up.

Bottom Line:
We remain in a low volatile - long term Bull market. The Portfolio Thermostat holds Exchange Traded Funds (ETFs) that the Portfolio Thermostat model identifies as having Bullish characteristics. The Portfolio Thermostat rotates from an existing holding when the position is no longer benefiting from the changing market environment.

The goal of the Portfolio Thermostat process is to limit risk to the normal fluctuations called market noise while participating in securities that pass the models screening requirements for displaying Bullish characteristics.

The Portfolio Thermostat portfolio had a very strong fourth quarter last year. It looks like our first quarter returns ended about where it started. It is normal to see a sideways consolidation following a period of higher than normal gains.

First Quarter 2014  
S&P 500 +1.8%
US Treasury Bonds +1.8%
60/40 TU S stock/bond (rebalanced) +1.8%
Foreign Developed Markets (MSCI EAFE) +0.7%
Emerging Markets Stocks (MSCI EM) -0.4%

Source: CapitalSpectator.com

Canterbury Investment Management: Tom Hardin

More About Tom Hardin

As Chief Investment Officer, Tom Hardin, Chartered Market Technician (CMT), makes all the final decisions on all investment and portfolio management decisions for Canterbury Investment Management. Tom has more than 30 years experience in the investment management industry and has broad breadth of knowledge. He is known as an innovator, educator and been revolutionary in the advancements in portfolio and risk management.

Every effort was used to provide accurate data and mathematical calculations to provide, what we believe to be, accurate results. Canterbury Investment Management, LLC, and its principal owners, make no guarantee of completeness or accuracy of data or calculations as well as conclusions of any statistical data or information contained in the simulation illustrated on this page. Past results or performance is in no way a guarantee of future results.