Q2 2023

Written By Andrei Sota

June 26, 2023

Closing the position in SPY, along with our Enterprise and Nostromo models.

June 23, 2023

We are following Nostromo's signal today and cutting exposure to Emerging Markets (EEM). This position was entirely speculative as a "Catch Up" trade that is getting stopped out. With the US Dollar having been able to hold support, more pressure could mount in the EM region. 

Selling may pick up in the following weeks and could have a way to go before bottoming. Sentiment is still decently high. We'll be looking to add back to exposure when this gauge bottoms, by rotating from SPY to individual names (increasing overall risk).

Executing the following order at today's close for the Sigma Portfolio:

  • SELL 100% EEM (Close Position)

June 16, 2023

We are starting to hedge our equity exposure by adding a position in Gold. Sooner or later, the rally in equities will come to a halt and a safe haven like gold might benefit.

The recent pullback in GLD is a fine place to initiate this position, with little downside.

Executing the following order at today's close for the Sigma Portfolio:

BUY 15% GLD (Initiate 15% Position)

June 14, 2023

Medical insurers are selling off today, as the CEO of UNH said, “We’re seeing that more seniors are just more comfortable accessing services for things that they might have pushed off a bit like knees and hips.”

As a consequence, insurers expect increased costs in the back half of the year. UNH has breached our stop level and we will close the position.

In order to maintain exposure to healthcare, we will include Stryker Medical (SYK) and Becton Dickinson and Company (BDX), two medical device producers.

Executing the following order at today's close for the Sigma Portfolio:

  • SELL 100% UNH (Close Position)

  • BUY 2% SYK (Initiate 2% Position)

  • BUY 2% BDX (Initiate 2% Position)

June 8, 2023

Our position in Microsoft was getting extended, when compared with our $315 price target. MSFT has triggered both a MACD SELL signal today and a Trend reversal signal the past week. It is time to book profits.

Executing the following order at today's close for the Sigma Portfolio:

SELL 100% MSFT (Close Position)

June 5, 2023

Following Nostromo’s initiative and adding 20% of Emerging Markets ETF (EEM) at today’s close. In real life, achieving this exposure level will require derivatives, and we are choosing an option spread for this trade.

June 1, 2023

In The Sigma Portfolio, we have added equity risk recently, and we are initiating two more positions today. We are also increasing our bond duration, by selling short term treasuries in favour of longer term ones. Here are the trades we will execute at the end of the session, bringing the portfolio to a 60-40 stocks / bonds allocation:

  • SELL 50% SHY (Reduce 50% of Position)

  • BUY 10% TLT (Add 10% to Position)

  • BUY 1% RTX (Initiate 1% Position)

  • BUY 1% ENPH (Initiate 1% Position)

May 30, 2023

WIth our strategies fully committed to chasing the rally in equities, we are taking smaller steps to catch up to the indicated exposure. We will explore their positioning in an upcoming article on Thursday.

ELV (Elevance Health) has violated our stop-loss and will be cut at today's close. Instead, we will add to positions that have worked recently (ZION, OMF) and buying GPC on the dip here.

We are also adding 15% to SPY, as it is the only instrument correctly set up, given the current state of the market. When and if the rally is confirmed, we will further diversify exposure into singular names. For now, liquidity and size means safety.

Executing the following order at today's close for the Sigma Portfolio:

  • SELL 100% ELV (Close Position)

  • BUY 1% OMF (Add 1% to Position)

  • BUY 1% ZION (Add 1% to Position)

  • BUY 1% GPC (Add 1% to Position)

  • BUY 15% SPY (Add 15% to Position)

May 23, 2023

In The Sigma Portfolio, we plan to gradually take on more risk, and buy “dips”. We will work our way to 60-70% equity allocation as long as support holds in the broad market.

Today’s rebalance order will remove some Tech exposure, in favor of our Basic Materials and Energy positions. It will also raise our overall equity allocation to 44%.

  • SELL 50% MSFT (Take Profit)

  • BUY 2% XOM (Add 2% to Position)

  • BUY 1% ALB (Add 1% to Position)

May, 19, 2023

This morning, our automated newsletter generated several "continuation" BUY signals for several ETFs. Our Enterprise and Nostromo strategies have triggered BUY signals as well, and are just catching up to us in terms of equity risk allocation.

What caught our attention this time, was the rebound potential of Financials. While banks and financial institutions are risky plays at the moment, some of them offer better risk-reward potential than Technology or Communications names, which are pushing overbought extremes.

If the economy holds up, we believe the market has unfairly penalized these two names.

These are starter positions that we plan to build on, if the market continues to hold up well.

Executing the following order at today's close for the Sigma Portfolio:

  • BUY 1% ZION (Initiate 1% Position)

  • BUY 1% OMF (initiate 1% Position)

This way, we are honoring our strategies BUY signal, while not chasing the latest AI meme.

May 17, 2023

We are taking an action today to clean up our portfolio using the “Removals” section of our Portfolio Tracker. The ADM position has not worked recently and has violated our technical stop level. We are replacing it with similar themed companies in the Basic Materials / Energy sector, without affecting the overall allocation of the portfolio. Executing the following trades at today’s market close:

  • SELL 100% ADM (Close Position)

  • BUY 2% XOM (Initiate 2% Position)

  • BUY 1% ALB (Initiate 1% Position)

May 9, 2023

This morning, our automated newsletter generated several "continuation" BUY signals for two ETFs that caught our eye: Nasdaq (QQQ) and Tech (XLK).

In order to benefit from the slight bump in performance these signals can bring us, we are initiating a position in AMD at today's close.

This is a starter position, and is meant to better align our portfolio to the "large cap, liquid, tech / long duration assets" investment theme. As the risk / reward setup is fair at this point, the position size will be set at 1% and we will monitor it for dip-buying opportunities. Executing the following order at today's close for the Sigma Portfolio:

  • BUY 1% AMD (Initiate 1% Position)

We are working with a $105 Price Target, and 20% CAGR slope:

 

April 25, 2023

We are removing the trading position in the Equally Weighted S&P500 ETF (RSP) at today's close. As discussed, a period of weakness and risk-off is setting in short-term, and we'd rather have a bit more cash on hand to buy back in, eventually. Horizon's reduction of equity exposure today also confirms this move.

Executing the following order at the close, for the Sigma Portfolio:

  • SELL 100% RSP (Close Position)

A technical trader would also spot the head and shoulders pattern forming in this ETF as well + the confirming MACD SELL signal.

April 20, 2023

The equity market has taken a turn lower today, after attempting to break even. We will follow Nostromo's order in the Sigma Portfolio and take profits in Emerging Markets (EEM). This position makes up around 7% of equity allocation in the portfolio.

Executing the following order at the close, for the Sigma Portfolio:

  • SELL 100% EEM (Close Position)

A technical trader would also spot the head and shoulders pattern forming in many "mid-market" ETFs. 

Andrei Sota
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