WEGENER, LLC - Adaptive Asset Management

Ideal Stock Market Exposure - No Change

Our Long Term Reversal Factors and Intermediate Trend Factors remain negative. Our Ideal Stock Market Exposure remains 0%.

Ideal Stock Market Exposure Lowered

Our Long Term Reversal Factors remain negative. Our Short Term Trend Factors have again turned negative.  Our Ideal Market Exposure has been lowered to 0%.

This returns us to the environment that we discussed here.

Ideal Stock Market Exposure Increased

Our Long Term Reversal Factors remain negative. Our Short Term Trend Factors have again turned positive.  Our Ideal Market Exposure has been increased to 70-80%.

This returns us to the environment that we discussed here.

Ideal Stock Market Exposure Lowered

Our Long Term Reversal Factors remain negative. Our Short Term Trend Factors have turned negative.  Our Ideal Market Exposure has been lowered to 0%.

The recent change is consistent with a bear market and the market moving below its August low by the end of next couple weeks. However, we can't rule our Short Term Trend Factors again turning positive as soon as next week. 

Overall this is a negative environment for stocks, on average it produces negative returns, and some of those instances historically are extremely negative. So it is important that market exposure be reduced here.

 

Ideal Stock Market Exposure Increased

Our Long Term Reversal Factors remain negative. Our Short Term Trend Factors turned positive at the start of the week.  Our Ideal Market Exposure has been increased to 70-80%.

This is consistent with the end of a correction within a bull or bear market and a couple months where the market recovers some of its recent losses. While we can only know whether we are in a bull or bear market in hindsight, if we are still in a bull market we typically see a full recovery. If we are in a bear market we would only expect a partial recovery of recent losses.

There is also the potential, typically in a bear market, for our Short Term Trend Factors to abruptly shift negative, which could cause us to reduce our Ideal Market Exposure at a time when the stock market is trading at a lower level than it is trading today.