Current Commentary and Weightings as of 03/14/19: We will make some changes to our Small Cap ETF Sector Portfolio. We will move PSCT and PSCH into Overweight, moving PSCI and PSCM to Equal Weight. Sector investors should consider adding these to large cap sector portfolios at this time. Most of the time, this adds to performance without substantially increasing risk. We have discussed this in meetings for several years, and it looks like an excellent time to implement this strategy. There are buyout candidates in PSCT and PSCH, and in addition PSCH has corrected enough from the high to move back into this area.
Past Commentary:
07/27/18: We move PSCH to an Equal Weight and PSCM to an Over Weight.
06/22/17: We will move PSCT to an Equal Weight; move PSCC to an Under Weight, and PSCH to an Over Weight.
12/01/16: We will move PSCE to an EQUAL WEIGHT and Lower PSCH to an UNDER WEIGHT.
08/25/16: We will move PSCH to an EQUAL WEIGHT and raise PSCI to an OVER WEIGHT. We will move PSCM to an EQUAL WEIGHT. We will move PSCU to an underweight.
02/03/16: We will move PSCH to an Overweight from an Under Weight. We will move PSCE back to an Underweight, and PSCU to an Equal Weight. We will move PSCF to an equal Weight.
10/23/15: Healthcare, in particular, has disappointed on this rally and as a result we will move this to an underweight. PSCH may be weak into yearend. We move PSCU to Underweight as it is sensitive to rates. We discussed the possibility of short-term out performance by PSCE in last month’s Sector Review and recommended trading this. Now, it has hit objectives and traders should move back to a strong equal weight.
07/21/15: We change the Small Cap Sector portfolio here by raising PSCF to an OVER WEIGHT, and lowering PSCE to an UNDER WEIGHT.
06/25/15: We will make the following changes to our Sector Portfolios as of the close today, June 25, 2015. In the Small Cap Sector Portfolio: We will LOWER PSCH to an Equal Weight, and RAISE PSCI to an Equal Weight. Healthcare’s accumulation models have been weakening for some time.
01/21/15: Based on the Sector Report released today, XLY goes to an equal weight from under and XLB goes to an underweight from equal. This is mirrored in the Small Cap Portfolio for PSCD and PSCM.
07/02/14: We will move PSCI to an Underweight, PSCM to Equal Weight, PSCT and PSCH to an Overweight. We believe there are buyout chances in small cap healthcare and technology that do not exist in the respective large cap sectors. Small Cap Sectors are also designed to be more aggressive and this move is aggressive. We continue to like our Industrials and Materials themes in large caps, although these may be conservative.
06/03/14: XLE has improved since the last Sector Review, but oil itself did not pull back enough to suggest a strong summer driving rally is in the cards. Service stocks are more attractive than stocks sensitive to the price of oil and gas, and with services starting to act better, so we added HAL to our “liked” stocks in the Sector Review three months ago. SLB is also strong, and more are strengthening. Relative performance has improved enough over the last three months so we will upgrade XLE to an equal weight. THIS ALSO MOVES XLE AND PSCE TO EQUAL WEIGHTS IN THEIR RESPECTIVE PORTFOLIOS.
This was the worst performing sector is 2013, and we moved it to an equal weight at the beginning of 2014. We now move it back to an under weight as it is starting to lag, and the ATT/Direct TV merger should put a damper on the performance of “T”, a major constituent. THIS MOVES BOTH IYZ AND PSCT TO UNDERWEIGHTS IN THEIR RESPECTIVE PORTFOLIOS.
03/17/14: PSCI is still our favorite sector but we move PSCT to an equal weight and PSCM to an overweight. Tech has rallied, and could pause at this time, as it has advanced 10% from the breakout of the triple top.
01/21/14: We move PSCE to an UNDER WEIGHT. PSCE has weak performance in the strongest seasonal time of the year, and this winter has been very cold. Relative price has been weak since mid-2013 on PSCE as well.
11/18/13: We will move PSCE to an equal weight to reflect positive seasonality in oil. Energy often has seasonal strength in the winter.
08/16/13: We RAISE PSCM to an Equal Weight and LOWER PSCE and PSCD to Under Weights. We RAISE PSCT to an Over Weight. Accumulation models on PSCM have improved, and deteriorated significantly on PSCD, and in addition PSCD has outperformed five years in a row – a sixth would be unusual. PSCT has improving accumulation models, is an improving intermediate chart, and often outperforms in the fourth quarter. PSCE is ending the summer weaker than expected and often underperforms into October. Some key oil stocks have missed earnings, raising the possibility of negative earnings revisions in the third quarter across the energy sector.
04/15/13: With the changes in the current Sector Report, we will also make adjustments in our Small Cap Sectors. We will move PSCM to an underweight and raise PSCU to an equal.
01/03/13: We are making changes to the Small Cap Sectors only: We will overweight PSCI (Industrials), Equal Weight PSCM (Materials) and PSCC (Consumer Staples), and Underweight PSCU (Utilities). We already tilted towards industrials in Large Cap Sectors. Small Cap Sectors is designed to be more aggressive.
10/01/12: We implement this portfolio using the weights in our current Sector Review, which are defensive, given the rally from the June low.