Getting Back in the Market

Jeff has had a busy month. He sent this post in from the road.
    ~ Renae

Market timing is always a challenge.  Even after a well timed exit, the trader has the question of when to get back in.  Many do this by feel, also known as guesswork.  We recommend determining consistent rules and following them in a disciplined fashion.

Trading sectors has a big advantage when it comes time for re-entry.  Right now, for example, our sector ETF model does not yet signal a buy on the overall market, but it has recommended 5 of the 44 sectors we follow.  This lets us get invested gradually as we discover the best new sector buys.

Why aren’t the top rated sectors the ones that we buy?  The sector rating is a raw score of the overall attractiveness.  The sector must still qualify as a buy using special risk/reward criteria that Vince has developed.  The model rejects sectors that have risen too far too fast.  It also disqualifies sectors with excessive volatility.

Here’s the updated table of ratings and results for the most recent cycle.