Author: Jesse Barkasy
Covestor model: Trend Following
The markets turned down in May after a six month uptrend. The trend following model bought a few breakouts in May and the reality is that the downturn in many stocks began to spread. We cut losses as well as some gains as the downtrend became more pronounced.
The trend following model will continue to look for and buy any new trends that it can find within the context of the market behavior. The model will check to see if some reversals of trends present themselves as the markets potentially become oversold.
Everyone wants to know about Facebook (FB)! We have a lot to say about it here at the Trend Following Headquarters FaceBook is in a downtrend. That is all we need to know.
Europe dominates the news as well and the Trend Following model looks at the trend to tell us when opportunity presents itself. Even if the news gets worse we will follow that market and stocks. If the trend it turns up according to our trigger points, we will buy.
With this downtrend we hope to ferret out some new great leadership stocks in the next few months. There is also an opportunity to attempt to ride Inverse ETFs. However, the model has found that many ETF’s seem to degrade and do not move in the direction of the market as much as the actual market itself in many instances. That being said, we will carefully consider trying to ride inverse ETF’s as the downturn forms.
As this update is being written the Trend Following model is playing small until we see some clear trends to jump on. The trend following model will let the news bring greed and mental panic to other investors. We will let the stocks and the markets tell us what to do.
