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V2 Model February 26, 2022 UPDATE

V2 Model February 26, 2022 UPDATE

Recap

The stock market made a huge comeback this week, initially selling off on a worsening Russia-Ukraine situation, then rallying on optimism that the situation won't have a material impact on the economy.

The S&P 500 ended the week with a 0.8% gain after being down as much as 5.4% from last Friday's close. The Nasdaq Composite (+1.1%) and Russell 2000 (+1.6%) each gained over 1.0% after being down as much 7.1% and 5.7%, respectively. The Dow Jones Industrial Average lost 0.1% after being down 5.3% intraweek.

V2 was down this week as we shifted to a 1/3 short position.

Performance This Week / YTD

V2 -2.4% / -13.30%

SPY +.81% / -7.83%

QQQ +1.50% / -13.09%

Changes

None.

V2 Holdings (Allocation)

TZA (32%)

CASH (68%)

Charts

The first chart is of the V2 Ratio for TZA. You can see the red/blue ema has not crossed green, but has rolled over and lost momentum. You can also see the ratio has not crossed the upward trend line. For now this looks to us like a counter trend rally and we will keep our postion in TZA.

Confirming the V2 ratio, next is 4 hour chart of IWM. Small Caps. This is a good basis to follow for TNA and TZA. You can see we have not broken the trend line from the first of the year, nor the 38% Fib retracement. Even with the strong 2 day rally in small caps, we have not broken the intermediate downtrend. That may happen, but it has not happened yet.

Notes

One other perspective. While the Sp500 was up on Friday, it was defensive sectors - financials, staples, utilities and health care - that outperformed tech and growth. Consumer Staples more than doubled QQQ. Not earth shattering, but if the bottom was truly in this week most likely we would have seen tech and growth do better.

The Vig Co. is now on Twitter. Please follow us to get daily comments and perspectives. https://twitter.com/TheVigCompany

You can see our recent blog post on the importance of the weekly close here. A Wild Week Needs A Longer Point Of View.

Plan

Our plan going forward? Market trends may change and they may change rapidly. We will stay nimble and be vigilant to changes in either direction. We will follow the math.

Distance=Victory

Chris

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