V2 Model May 15, 2021 Update

Good morning!

Welcome new Members.

Here is V2 Model performance versus our benchmark for the SP500 the ETF SPY.

This week:

V2 -8.49%

SPY -1.31%

This year:

V2 +26.71%

SPY +11.79%

The major US markets were down this week, as the potential for higher inflation and interest rates dominated the news. To some degree, the markets shrugged this off (with new mask guidance) late in the week and we experienced a near-term bounce.

The V2 Model had a poor week even with a strong finish on Thursday and Friday. Markets like this can be frustrating but if we stick with our plan, and stick with our math, we will end up in the right place.

You can see below consolidated Ratio #2 charts for each holding. On each chart, the faster moving orange EMA is above the slower green crossing line. As such, we remain long. Notice on the UPRO chart that we bounced off the cross line on Friday. Cool.

Also notice that we had short-term MACD black over a red line cross on UPRO and HIBL. This is improving momentum and short-term bullish. Also, see that NAIL did NOT experience this cross. A potential concern. And one we will address below.

For your perspective, I have enclosed a couple of additional charts.

JNK vs IEF. "High-Risk" credit vs "Safe" credit. You can see this ratio has an intermediate-term downtrend, is consolidating, and has not made a higher high. This ratio is waving a yellow flag and telling us to pay attention. We would like to see improvement here.
ITB vs SPY. ITB is a base ETF for homebuilders (the non-leveraged proxy for NAIL. Here we compare it to the SP500. You can see it is touching a long-term resistance point. This has the potential to break either direction.
FAS vs NAIL. This compares the performance of Financial Companies to Homebuilders. You can see the performance of each is about the same YTD. But short-term trends are moving to favor FAS.

Based on points 2 and 3 will make a CHANGE to our holdings during Monday's session. We will sell NAIL and buy FAS with the proceeds.

Our plan this week? We will stay flexible and keep an open mind to changes in either direction. We will not make assumptions. We will go day by day. We will follow the math.

After the CHANGE V2 will hold:

FAS (35%)

HIBL (33%)

UPRO (33%)

We are 100% invested.

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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