Here’s the latest update, which includes the cutline pricing information after yesterday’s sell off. What’s interesting is that 2 bear market funds have broken above the cutline and moved into the +12 and +13 placement positions.
The momentum figures clearly show that it’s too early to make a commitment to the short side. But when is the right time?
First, let’s take a look at the latest cut line table for mutual funds:
For better viewing and printing, download the PDF: http://www.successful-investment.com/SSTables/MFCutline041811.pdf
Both bear market funds, RYJUX and RRPIX, have moved almost 1% above the cut, or their long-term trend lines. While a directional shift into bear market territory has not occurred yet, I will simply watch these positions.
Remember, as long as the underlying trend in the market place is upward, as defined by my Trend Tracking Indexes (TTIs) being in positive territory, the bull market still rules. Once a sell has been given, that would be the time to consider bear market funds/ETFs. That’s how I approach it in my advisor practice.
Jumping in too early can be rewarding, if you happen to be lucky, but the odds are definitely not in your favor.
For quick reference to last week’s issue:
4/11/2011: https://theetfbully.com/2011/04/mutual-funds-on-the-cutline%E2%80%94helping-you-to-better-manage-your-401k/Contact Ulli
If I understand your %M/A calculation, it looks like these 2 bear funds have actually moved down towards the cut line, i.e., they didn’t show up last week because they were a couple % higher.
Also, for some reason they have largely followed the SPY trend for last year, though always doing worse. The year prior to that they seemed to move more in opposition to SPY. Not sure what they are composed of.