V2 Model March 12, 2022 UPDATE

March 12, 2022

Recap

For the second straight week, all major equity markets finished lower. The Russia-Ukraine conflict and its effects on oil prices and thus inflation have added to the previously existing monetary policy uncertainty which continues to give market participants pause.

V2 was down this week and we shifted from a 1/3 short position to cash. We continue to balance shorter-term risks with long-term outcomes.

Performance This Week / YTD

V2 -1.29% / -13.05%

SPY -2.80% / -11.56%

QQQ -3.82% / -18.46%

Changes

None.

V2 Holdings (Allocation)

CASH (100%)

Charts

The first chart is the consolidated V2 Ratio for UPRO (3x Sp500). You can see the ratio is below the inflection line and we remain hedged in CASH.

The second chart is the Sp500 (SPY) four-hour chart for the past 4 months. You can see in the annotations that the price has made a series of lower lows. You can also see the two indicators, MACD and RSI, have both made higher lows at the same time. This is a class A bullish divergence and often (not always) indicate a reversal of a downtrend and are often a signal of a coming rally. This is one of the reasons we released our short position and moved to CASH.

Notes

We have a new blog post up this morning tracking the VIX for the past 20 years and what it might say about the coming direction of the market. Here is the link. What Does The VIX...

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

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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