Updates & Commentary

Weekly Updates on the KP Models

Model Strengthens Further

Posted by on Sunday, Oct 15, 2017

Model Strengthens Further

The Model.  Both components of our time-tested Trend Model are emphatically positive.  The environment is green until further notice. Comment.  It has been well publicized that professional managers almost always underperform their benchmark indices. For the ten years ended June, 2017 for example, 98.29% of large cap growth funds underperformed their benchmark, based on research by Standard & Poor’s (SPIVA).  What’s more, we know that individuals managing their own portfolios perform even worse: they underperform by 2-3% a year (or more).  One might certainly wonder,...

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“Best Six Months” Just Ahead

Posted by on Sunday, Oct 8, 2017

“Best Six Months” Just Ahead

The Models: The KP Trend Model is solidly GREEN with the Intermediate-Term component picking up momentum as it accelerated to its highest levels for the year this past week. Tactical exposure remains at Plus 1. Comments: The powerful positive action, both in price and internal data continues to confound. Yale Hirsch, creator of the venerable Stock Trader’s Almanac, formulated several notable market indicators, including “The Best Six Months of the Year” strategy. They discovered through historical research that the period from November 1 to April 30 garnered the best returns for stock...

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US Equity Trend Strengthens

Posted by on Sunday, Oct 1, 2017

US Equity Trend Strengthens

The Model:  Momentum has been broadening from several perspectives.  The KP Model Trend condition remains green. Comment:  The market advance so far in 2017 feels quite restrained when we experience the price action day by day.  Low volatility, fractional advances. But as we zoom out a bit, those modest daily gains have combined to a rather spectacular advance over the past year.  Since the last time the Model was red —  late in February of 2016 — the US markets have essentially been straight up, through Brexit and the Trump election, as the chart makes clear. Now, we enter into the...

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Trend Model Positive

Posted by on Sunday, Sep 24, 2017

Trend Model Positive

The Models: The KP Trend Model remains GREEN, 100% committed to long equities. Comments: In the context of what continues to be surprisingly robust underlying momentum, short-term oscillator studies pulled back from recent overbought conditions, but just to their neutral zones. Noticeable Sector rotation also continues, with the Russell 2000 small cap index (RUT) having a banner week, joined by the financials, while some of the ‘majors’ rested. With the KP Intermediate-Term component of the Trend Model further pulling away to the upside from its neutral trigger line after a brief...

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Trend Model Continues in “Risk-on” Position

Posted by on Sunday, Sep 17, 2017

Trend Model Continues in “Risk-on” Position

The Model:  The KP Trend Model returned to positive (green status) on September 7 after spending almost a month in the more cautionary transitional “yellow” condition. Comment:  Despite negative seasonal pressures, US equity markets remain remarkably robust.  Our favorite “risk-on” index is the Nasdaq 100 (NDX) which has now formed a triangular consolidation near all-time highs and appears poised to move higher, short...

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Model Returns to Green Status – 100% Long Equities

Posted by on Monday, Sep 11, 2017

Model Returns to Green Status – 100% Long Equities

The Models: The Intermediate-Term component of the KP Trend Model shifted to Positive Thursday September 7th, bringing both components in sync and returning the Trend Model to Green status, 100% Long Equities. Tactically, exposure guidance shifts to Plus 1. Comments: Momentum generated the week prior to the Labor Day holiday was robust enough to overcome the internal weakness this past week, propelling the Intermediate-Term component to modestly cross above its neutral trigger line into positive territory. The Short-Term oscillators pulled back to end the week in their neutral zones,...

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