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V2 Model October 3, 2020 Update

V2 Model October 3, 2020 Update

Good morning!

Welcome new members.

Here is V2 performance vs our benchmark of SPY.

This week:

V2 -5.54%

SPY +1.55%

This year:

V2 +121.66%

SPY +5.25%

We had a busy week. We were short, cash, and now long (50%).

See the V2 Ratio Chart below:

You can see the key ratios (red and blue) remained above the green trigger line. They are in a very tight range from 5.50 to 5.54 (less than 1%) and the green average slope is flat. This is a very indecisive look.
The Chande Trend Meter is in the no trend yellow zone at 45.
We had a above zero black over red cross, so we lost some momentum.
Relative Strength is weak at just under the 50 mark.

There are a number of concerns facing us. The Election, Economy, Stimulus (or lack there of), Virus, and now the President testing positive. All will be issues going forward, but we do not anticipate what is going to happen. For now the look is tight and indecisive.

The good news is the V2 Model has us only 50% long, as a number of indicators did not cross last week. This kept our volatility down. Related to that, with the news of the President getting sick we did NOT see a massive run to "Risk Off" assets on Friday:

The VIX (volatilty ) was up only 3.48%. The VIX spiked in the morning and then trended lower all day Friday.

TLT (20 year treasuries) was down .37%

AGG (bonds) was down .10%

GLD (gold) was down .09%

Looking at the above numbers, demand for safe areas actually decreased on Friday. The could bode well for a rebound on Monday.

If the Ratio changes to a point of reallocation we will notify everyone.

We will stay flexible and keep an open mind to changes in either direction. We will follow the math.

V2 currently holds TQQQ (50%), Cash (50%).

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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