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V2 Model December 12, 2020 Update

V2 Model December 12, 2020 Update

December 12, 2020

Good morning!

Welcome new Members.

Here is V2 performance versus our benchmark of SPY.

This week:

V2 -1.05%

SPY -.96%

This year:

V2 +132.70%

SPY +15.48%

The major market indexes finished the week lower. Vaccine progress was outweighed by concerns over rising COVID-19 cases, a lackluster jobs report, and increasing concerns about whether Washington will deliver a fiscal stimulus deal. International markets also finished the week lower. Emerging markets (MSCI EM Index) outperformed their developed international counterparts, as denoted by the MSCI EAFE, by more than one-half percent. Moreover, the real estate, financial, and technology sectors trailed the broad market this week.

The Russell 2000 was a bright spot this week, bucking the market’s downtrend by returning over 0.5% for the week. TNA was up 3.18% this week.

I have enclosed V2 Ratio #1 charts for each holding. The good news is the faster blue and orange EMAs are still above upward sloping green. As such, we remain long. TNA is in the strongest technical position. TQQQ is in the weakest position. Not pictured here, but we have lost short term technical momentum: RSI, MACD, and Chande all have short term down slopes. While this is of concern, we could be experiencing a short term correction with Washington uncertainty and a normal pullback after a run-up. Time will tell.

Also of note, the VIX has climbed 13.32% so far in December to close Friday at 23.31. So expectations for future volatility have been on the short-term increase. For the market to improve we would like to see this move back towards 20 and below in the coming days.

Our plan this week? We will stay flexible and keep an open mind to changes in either direction. We will follow the math.

V2 currently holds:

TQQQ (32%)

UPRO (31%)

TNA (37%)

The V2 Model has performed exactly as expected.

Distance=Victory

Chris

ps. Please invite others to join The Vig Company. And also, please, do not share the V2 Model allocations with others. We keep the monthly charges low for all as everyone pays their own way. Our information should not be copied or shared in any form.

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