Have We Hit A February Bottom?

Above is a weekly chart of the Rydex Total Assets Bear Fund Index for the past 4 years. The higher this is, the more investors have in bear funds. While the major markets were off this week this index actually decreased 3.45%. More interesting is I have marked red lines on the Rate of Change indicator the dates after spikes where it returned to zero. Each of the last three times this has happened (since 2018) The SP500 improved an average of 15.41% over the next four months. Now, look where we are in the red box. The ROC has NOT returned to zero yet. We also have upward-sloping short-term EMAs. Using this indicator it would be tough to say the bottom is in and I would expect a retest of the lows.

Also, note the RSI on the bottom of the chart. Each time - near a market bottom - it has moved to overbought territory (In green). We are not there yet.

Our V2 Model tracks 122 asset class ratios in different time frames. The week was not a total washout with 42 (34%) of the ratios in the green. Normally on bottoming weeks, we see closer to 90% in the negative column. This measurement tells us we are in a rough spot, but we may not have bottomed yet.

For a turnaround to occur we would need improving news on the inflation, interest rate, Russia fronts.

No single indicator gives market clarity. They each give a point of view that we factor into our model. This is not a prediction, it is a perspective that we need to pay attention to various possible outcomes.

If you would like to see our holdings, allocation, and experience how we manage our portfolio please sign up for our V2 Newsletter. Just hit the button below.

Distance=Victory

Chris

The V2 Model has gained an impressive 1,454%% from 2016 through 2021.

6X the performance of SP500 (2016-2021)

+83.27% 3-Year Annualized Returns (2019-2021)

+69.22% 5-Year Annualized Returns (2017-2021)

V2 Newsletter performance rank compared to all ETFs:

Top 10% 2021 (#243 out of 2867)

Top 1% 3-Year (#9 out of 1896)

Top 1% 5-Year (#4 out of 1896)

Market Data From Morningstar and Etrade.

We do not anticipate what is going to happen. We allocate based on where things are. We do not forecast, we follow the math and work to get on the right side of the next extended trend.

V2 is a proprietary investment Model the results of which we make available in our newsletter. We give our holdings, changes before they occur, our allocations, and performance on an ongoing basis. You can discover more about the Model, our performance, and how it works by checking out our website.

We have researched and developed a pool of common and popular ETFs. We will select which ETFs to invest in based on market conditions and our short-term, medium-term, and long-term trends. We will also model asset class ratio behavior for our decision-making process. Leverage will be used when appropriate and we will short the market in a downturn. If no investments meet our rules, we will go to cash. We will change holdings at any time during the month.

The investment picks may be in large-cap growth, treasuries, leverage, derivatives. We may short the market or go to cash. Holdings may include SPXU, SDS, SH, SPY, SSO, UPRO, TLT, AGG, TQQQ, SQQQ, or CASH at any time.

Chris Vig is president of The Vig Company and is an investor, artist, author, business consultant and former CEO living in Monona, WI. This article is for entertainment purposes only. We may own, buy, or sell any security listed here at any time. Do your own diligence when investing your hard-earned cash. Follow The Vig Company on Facebook.

You can learn more about the model, its holdings, and how it works by going through each link on our website. The V2 newsletter is available for $15 a month. And of course, you can unsubscribe at any time.

THE VIG COMPANY LLC INFORMATION AND NEWSLETTERS ARE NOT A RECOMMENDATION TO BUY OR SELL SECURITIES. WE ARE SIMPLY LISTING THE RESULTS OF OUR MODEL. WE MAY BUY, HOLD, OR SELL ANY SECURITY LISTED IN OUR INFORMATION AT ANY TIME. WE ARE NOT REGISTERED INVESTMENT ADVISORS AND HAVE NO UNDERSTANDING OF YOUR PERSONAL FINANCIAL SITUATION, RISK TOLERANCES, OR INVESTING OBJECTIVES. ANY INVESTMENT DECISIONS YOU MAKE ARE YOUR OWN. PLEASE DO YOUR OWN DILIGENCE WHEN INVESTING YOUR HARD-EARNED MONEY.

COPYRIGHT 2020 THE VIG COMPANY LLC 6203 RIDGEWOOD AVE. MONONA, WI 53716. THEVIGCO@GMAIL.COM