@Old_Skeet. I need to understand what you are doing more. I tried doing some sector trading in 2017. I lost a little on many trades, but earned a lot on few trades and was net positive. However, I decided to take a step back and stop. Unfortunately for me my "model" would have had me in XLE from November if I had stuck to it :-(
Frankly, after my recent accident my priorities also changed. BTW, all I turned 50 recently and realized I was 10 pounds overweight. So instead of buying / selling I'm pondering my weight and health right now for a bit.

Hi again @VintageFreak.
Let's go back to the 500 Index compass. It is comprised of the major sector etf's. In portfolio manager I follow these tickers plus EQL which is an equally weighted sector etf and serves as my bogey. If you want to beat the bogey you have to be in the sectors performing above the bogey and out of those that trail it. With this I choose the three that are performing the best for the time period I have chossen (usually the three month time frame for the spiff). These three become my lead pack and within the pack there is a lead etf (hound). This etf becomes the spiff "money" hound so to speak and remains the money hound as long as it can remain a member of the lead pack. Sould it falter and unable to keep pace with the pack then the spiff is closed and a new lead hound is choosen with a new spiff being placed. It's a momenutm strategy. I'll be posting weekly on it for a while anyway. After a while it will beome "old news" and the postings will fade.
So follow along ... Let's see how Old_Skeet did in week one.
Week one results. The current lead 90 day hound XLY as the year began had a starting value of $98.69. Thus far it is up 3.13% and remains a lead 90 day pack member. The other two are XLE (up 3.75%) and XLK (up 3.67%) for the week. EQL the bogey hound is up 1.64%. XLB is closing fast on the lead 90 day pack (with XLI & XLF close behind) and might one or more may soon become a pack member of the current lead hounds being removed and perhaps a new lead hound taking over (spiff hound). We want know this until market close Friday the 12th when the weekly results get tabulated.
Starting week two the lead pack remains the same with XLY the spiff hound.
Can XLY maintain the pace? Will there be a new lead hound? Will there be a new lead pack? Perhaps.
So stay tuned.

@Old_Skeet. I need to understand what you are doing more. I tried doing some sector trading in 2017. I lost a little on many trades, but earned a lot on few trades and was net positive. However, I decided to take a step back and stop. Unfortunately for me my "model" would have had me in XLE from November if I had stuck to it :-(
Frankly, after my recent accident my priorities also changed. BTW, all I turned 50 recently and realized I was 10 pounds overweight. So instead of buying / selling I'm pondering my weight and health right now for a bit.

In my lifetime I been through a number of these selling stampedes in the ... 70's ... 80's ... 90's ... 00's ... 10's with some leading into a recession. With this, here is what I have observed. Stock market swings are part of investing. If the 500 Index would decline 10% form current valuation of 2743 that would bubble somewhere around 2470 (reasonable). Beyond a 10% decline look for a good number of margin calls to kick in so expect a 15% to 20% decline (coming pretty quickly) and that would bubble somewhere around 2330 to 2200 (concerning). Also, expect days to cover to keep rising as big money shorts. Beyond that more margin calls kick in as the selling stampede continues as some investors fail to meat their margin calls and their positions get sold out. By then big money starts to close out short positions (days to cover declines) and they should now start to buy back in as the little retail guy and weak sells out in the downdraft with stocks becoming oversold. After big money has established their buy back in positions now the little retail investor follows usually buying at a higher value than when they sold. So, just sitting for some is a strategy in of itself ... but, this takes a strong constitution to do this and not play big money's game through their shorting and sell down programs. This most often causes the weak and little mom and pop retail investor to sell out as they can stand no more paper losses. Hear the noise but watch what the big money investors do. Towards the end of the crash they then start to buy. And, if you have not sold out you will begin to see the value of your portfolio begin to rise and you can also begin to do some buying yourself as you deploy cash (hopefully built over time and not during the selling stampede) averaging back in.
My plan ... Living within my means is step 1 of my plan with little or no bebt. Being diverisfied within my risk tolerance is step two along with being mindful of asset values. Maintaining a sizeable cash position (built over time) is number three especially during periods of high stock market valuations. Having a sell down plan once stocks hit correction territory (if felt warranted) is number 4 by watching days to cover for short positions for SPY increase. And, finally, have a buy back in plan for the rebound is number 5 while good value exist and the market is oversold. If it was worth buying at 2743 and above then it's worth buying at 2470 and below.
As a guide, I like to see the days to cover short positions in decline. In short, work the market by not letting it work you. Have a plan and follow it; but, be flexible and revise when warranted. Most of all I tray to stay calm knowing I've got cash and I can begin to work on finding my buys while others are looking to see what they will sell during the selling stampede. Things worked well for me during the last stock market selling stampede that started in late December 2015 through January of 2016 and ended in February. It followed pretty much as I scripted above. After the 500 Index hit the 10% threshold I begin to buy in steps as the stampede continued thus averaging my buys. During the downdraft I bought three times and on the upswing twice. Here is what Jeffrey Saut of Raymond James had to say about the last selling stampede.
https://www.cnbc.com/2016/02/01/selling-stampede-ended-last-week-saut.html
My take away ... Three consecutive updays ends a selling stampede.
I wish all ... "Good Investing."
Old_Skeet

This is the post of savannahboy from InvestorVillage ( I follow his predictions for a long time and found them rather accurate):
One of the benefits to posting is that it forces you to think about what you're
going to say. In my case, my "Break Out (3) post forced me to think more about
an exit plan if I need one in 2018. Based upon my psychological make-up, my
exit plan needs to be relatively simple with some clear-cut "If-then" triggers
for expanding or contracting stock market exposure. I usually react much better
to volatility, if I've already planned for it.
After some rumination this weekend and listening to a helpful interview with
Ed Hyman, one of the great economists and market strategists, I've decided that
the market is in the midst of a melt-up that necessitates having an exit plan.
http://wealthtrack.com/1-economist-hyman-leading-value-manager-mclennan-discuss-economic-surges-super-bull-markets/
If so, then for 2018, I'm going with the following triggers in my exit plan:
1. If the yield curve inverts, the yield on a 10yr Treasury exceeds 3.0%, or
my portfolio reaches a certain amount (reflecting about a 12% increase in
the S&P 500 Index from 12/31/17), then I'll sell 20 of the 30 stocks in my
portfolio, which will leave the portfolio roughly 70% in cash, 26% in mostly
defensive, dividend-paying stocks and 4% in two spec stocks that I'm expecting
to do well in 2018 regardless of the market. I'll redeploy the cash after the
next bear market when the health care stocks start to recover (since I've found
that a rally in this sector often marks the low in bear markets).
2. If none of the conditions in no. 1 above have occurred by 6/30, I'll sell
the 9 stocks in my millennial group throughout July, leaving the portfolio roughly
30% in cash, 33% in chips, 33% in defensive stocks and 4% in spec stocks.
I'll redeploy the cash back into the millennial group with possibly a few
changes in stock selection if the Republicans retain control of Congress
after the mid-term elections (after which I'll be 100% invested) or go to 70%
in cash if the Democrats win. Of course, if one of the conditions in no. 1
above occurs at any time in 2018 or 2019, then I'll sell the stocks in the
millennial and chip groups, moving to 70% in cash as per no. 1 above.
Each investor should have his or her own exit plan based on his or her risk
tolerance, age, investment horizon, unrealized profits in the portfolio, etc.
I'm sharing my plan with the board for whatever value that might have to other board
members. Remember, nobody rings the bell at the top, although there are
certain tells that often signal a recession (and bear market) is coming.
GLTA! Savannah
https://www.investorvillage.com/smbd.asp?mb=10677&mn=20928&pt=msg&mid=17857086

“... it was clearer than crystal to the lords of the State preserves of loaves and fishes, that things in general were settled for ever.” (Dickens)
I’ve pretty much stopped reading / listening to most market commentary. And I’d have a hard time advising a young person just starting out investing today to throw money at this thing. It’s human tendency to expect whatever the current trend is to continue into the future indefinitely (be it up or down in the markets). So the euphoria is understandable. Now, if you think we can keep paying little old widows 1-2% on their savings while we “geniuses” rake in in 15-25% equity gains year after year - I’ve got a bridge I’ll sell.
@PBKCM - I did catch your point recently regarding inflation and think there’s a lot of truth to that. But at these levels, except for gold and real assets, I’m baffled. Maybe valuations are more reasonable outside U.S.

@bee,
Thanks for the information and links. In my brief review of this information ... Well, it just confirms that the stock market is richly priced. Does it mean the market is going to correct anytime soon? Probally not in view of the recent passage of tax reform. With this, I look for stocks to get even more pricey. And, if you own stocks as most of us on the board do ... our portfolios should increase in their value.
Many have talked about financial engineering at the corporate level and it now seems to have found its way into government. With the Corporate cash that is expected to come back to the US I'm thinking a good bit of it will be used by a good number of companies to buy back their own stock. In doing this it will reduce the amout of shares in float thus spreading corporate earnings over less shares thus increasing profits without an increase in revenue. I'm also thinking that there will not be a lot spent for capital inprovements for plant expansion and moderaziation; and, with unemployement at about 5% well, it just can not get much lower. Again, this will benefit stock holders.
I might make a lot of typos in my typing; but, I still think well enough to figure this out. In addition, I am not expecting the average working citizen to catch a windfall in the form of benefits and pay raises from thier companies.
I could continue ... but, what's the point. It all boils down to financial engineering.
Skeet

@Old_Skeet,
I enjoy and appreciate reading you market valuation updates and I came across this chart that values the US Equity Market in terms of US GDP....Market Cap to GDP. A quote from the linked article below:

Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine interview that "it is probably the best single measure of where valuations stand at any given moment."

I believe it is an attempt at comparing the historical price of US equities to the historical US GDP data. Here's the historical chart which dates back to the 1970 - today:

I added two "best fit" long term (45 years) trend lines with a 20% channel between the lower trend line (red) and the upper (green). What I find interesting about GDP is that it is less speculative than the Equity market and a truer reflection of how well an economy is performing. So, by comparing the two I believe the speculative nature of equity valuation ("are stocks expensive" vs "are stocks it cheap") should reveal itself, at least when compared to what the equity market should be a true reflection of, GDP.
De-trending the data would look like this:

Here's are some other sites that track US Equity Valuation as a percentage of GDP:
https://ycharts.com/indicators/us_total_market_capitalization
Article on this Valuation Matrix:
market-cap-to-gdp-an-updated-look-at-the-buffett-valuation-indicator
Investopedia's Definition of What is the 'Stock Market Capitalization To GDP Ratio'?
marketcapgdp

@MFO Members: Agree with Ron Rowland's current Market Leadership Strategy.
Regards,
Ted
Current Aggressive Holdings:
TRBCX + 4.12% YTD
QQQ + 3.95% YTD
MSOPX + 3.79% YTD

Yes skeet, that is the news letter I was thinking about. Haven't seen it for quite a while.
Your post got me thinking about the comparison between a "leadership" investment style that is proposed by yourself and "Invest-with-an-edge" versus a strategy that really is the opposite, a value strategy seen in DSENX. Very small sample size since DSENX is fairly new, but I can see from the link you attached and from M*'s DSENX performance data that the "buy under-valued sectors" strategy has done much better then "the sectors in favor" strategy. Again, very small amount of data. Both have outperformed the S&P 500 though.
Who knows. That's why I've left it to the fund managers to decide.
Have to go get my Buffalo chicken wings and beer ready for our 1st playoff game in 17 years!!! Some inside tail-gating in this zero degree weather.... GO BILLS.

@MikeM,
Thank you for the inquiry.
There are some similarities; but, no I am not copying his strategy.
To view his strategy you can view it by clicking on the below link and this will take you to the Market Leadership Strategy that he post weekly. I'm not sure how he ranks his investment choices or chooses them either. My ranking of assets is purely performance based for a number of time periods. You can build your on compass of assets you select then set them up in Morningstar's Portfolio Manager. The time periods I use to monitor are daily, monthly, quarterly, year-to-date, and one year. My two spiff compasses are composed of the 500 Index sectors and the second is a global compass that follows mostly the world regions (from Xray) plus a few others I selected. Maintaining and following the compasses has helped me better position money within my mutual fund portfolio. Plus, it takes me back to the dog track where I use to (many years ago) put a little spiff on the dogs. My strategy comes from a betting style I used at the dog track where I'd bet three dogs to wins place or show and modified it down to the Pack and Lead Hound Strategy for investment purposes.
Here is the link to Market Leadership Strategy that you referenced.
http://investwithanedge.com/market-leadership-strategy

Hi @VintageFreak,
Thanks for making comment on my Pack and Lead Hound Strategy.
Please know, that the pack is in flux and changes with the movement of the sectors. Currently, the sectors that lead the three month bogey hound EQL are XLF, XLI, XLB, XLE, XLK & XLY (the last three currently making up the lead pack). Within this pack XLY is the current lead hound. Those that trail EQL are XLP, XLV, XLRE & XLU. There will perhaps be another hound added to my 500 Index kennel sometime this year and that is XTL (telecom). In addition to the lead hound strategy I use a pick three (win, place or show) strategy was well.
The 2018 hunt is on ... and, I've got spiff money on hounds in both compasses. And, as the pack and lead hound change so will my money. You can view how the 500 Index sector hounds are running by clicking on the link below.
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
Generally, there are daily hunts available Monday thru Friday from 9:30 am to 4:00 pm est (except holidays). Contact your local investment advisor (or broker, etc.) for investment details.
Old_Skeet
Note: I use EQL (an equally weighted sector etf) over SPY as my bogey hound. And, if a hound can't beat the fixed income bogey hound (AGG) then it's for sure a cash out day for it/them.

@MikeM
--- I'm inclined towards your direction, too. Leaning more towards the large cap. stuff; and for some of the reasoning provided from @msf . I continue to "feel" that the big kids will attempt to "eat" the smaller kids. 'Course some of these gathering of numerous assets did not do so well back in the 60's, 70's or 80's as the companies were going in so many directions, that they could not keep track of their "brand". I recall ITT company having a bazillion sub companies under their wing and there was others, too.
@Mark Ya, the TAXR thingy. Hope those folks know what they are doing. An interesting concept in the hands of a superior management group.
@Ted Correct at this time, as to no direct "tech" holding; but with the broad based etf's and/or funds one will discover enough tech. of some form; mostly of the large cap. type and of course, the FANG kids show up just about everywhere, except a bond fund.
A few samples of various tech. inclusions by percentage of the fund:
--- ITOT = 24%
--- VTI = 25%
--- SPY = 26%
--- FHLC = 25%
--- ACWI = 21%
--- FSPHX = 32%
--- GPROX = 21%
--- FPURX = 28%

WEALTHTRACK Episode #1429; Originally Broadcast a year ago, on January 05, 2017, unless they made a typo.
I checked; indeed the broadcast is the new one; they just written there, misleadingly, Originally Broadcast on January 05, 2017

"Probably a 50% chance I'm wrong though :)"
Allow me to say with 100% confidence that you are correct!
There are just too many things in this package that was rushed through without thought to make any predictions (aside from the one above). The mind reels.
Companies that are currently paying little or no taxes (due to other loopholes) can't benefit from taxes going lower. ISTM that it's the large companies with the armies of tax lawyers who are in this position. OTOH, it's those same armies that will be able to do the most with the new tax code.
20% tax break for some types of consultants. This could accelerate movement toward using contractors. Small companies may be able to make that transition more quickly (percentage-wise, at least). Maybe they'll offer to split the difference - take the same pay without benefits (healthcare, 401k match), but get a 20% discount on your income tax and a write-off for your health care.
Trump is pushing to allow small companies to band together and buy health insurance as if they were a single large company. That's a cost savings for small companies only.
Then there's the prospect of other countries cutting taxes (race to the bottom). That may help multinationals, but is less likely to help small domestic companies (except perhaps through their supply chain costs).
And on and on.

Still attempting to determine if there are particular equity areas that may be more happy from the "tax package"

In macro terms, I sway towards large companies doing better then small companies given the reduction in corporate tax brackets. I tend to believe large companies will use their billions in tax cuts for stock buy-backs, dividends and other ways to increase company dollar assets and stock price. I don't see that money being spent to create jobs as intended. So, the rich get richer. Might as well join the band-wagon.
Probably a 50% chance I'm wrong though :)

"Crazy" (Patsy Cline)
(originally by Willie Nelson)
---My rework meaning of some of the lyric.
1. I'm or I or my, being an individual investor.
2. You'd or you, the investing marketplace
Crazy
I'm crazy for feeling so lonely
I'm crazy
Crazy for feeling so blue
I knew
You'd love me as long as you wanted
And then some day
You'd leave me for somebody new
Worry
Why do I let myself worry?
Wondering
What in the world did I do?
Oh, crazy
For thinking that my love could hold you
I'm crazy for trying
And crazy for crying
And I'm crazy for loving you
Crazy
For thinking that my love could hold you
I'm crazy for trying
And crazy for crying
And I'm crazy for loving you

---The below M* link is category returns through Jan. 5 (Friday). OMG just about covers my thoughts for YTD for many sectors.
http://news.morningstar.com/fund-category-returns/
The one domestic area that is suffering and gett'in no love, and began this slide in 2017, is "Real estate".
Rough overview for this household's portfolio.......
1. will maintain FRIFX in the real estate space, it's 2017 return was +7.3%, and the fund maintains it's 50/50 equity/bond mix.
2. our portfolio mix is about 70/30, equity/bond with about 50% of the equity being healthcare sectors. Most of the healthcare arrives from direct investment into funds, but other percentages are also part of broad based U.S. equity holdings. When healthcare equity moves up an average of 3% in 4 trading days, I do pay much more attention.
Still attempting to determine if there are particular equity areas that may be more happy from the "tax package"; or if the equity market will be one big "love fest".
3. A repeat of a personal statement over the years; that the primary goal is to preserve capital with growth over the long term exceeding inflation and future taxation of the monies. Just the standard no brainer, eh? :)
Hey, have you a song lyric that somewhat describes the markets???
Okay, got to go outside "again" to move snow from one location to another near the driveway and sidewalk. More snow coming, the weather folks state. I'll use "brain freeze" as an excuse for any errors or omissions with this write, as it remains too cold here in Michigan.
Take care,
Catch

Also available from Schwab for no fee. I bought some RNWOX in May when it started.

I expect to hold this one for a while, yeah? Ended up buying at Vanguard. I should have kept looking for availability. After a while I just stopped thinking just like new Seafarer fund, these funds may never enter NTF platforms. Glad I checked.
Speaking of net new fund purchases, I reduced lot of funds as per plan in 2017, including completely eliminating HSGFX.
Another new purchase ARTTX at Fidelity. Hope I don't regret this. After going public, I'm very suspicious of motivations of Artisan. The only publicly trade MF company I really trust is TRP. I'm still ticked off by their excessive fawning over ARTYX. That manager has not done anything. ARTZX which can't seem to attract assets is doing as well. There is no value ARTYX manager is adding, but they are using press to tout his fund to attract assets.

FYI: The mutual fund industry has spent years trumpeting how costs have come down for investors. That’s true, but misleading. Asset managers haven’t exactly slashed their fees. Instead, the credit goes largely to investors—but some of them are being left behind.
Regards,
Ted
https://www.barrons.com/articles/the-great-fund-fee-divide-1515214360

Hello.
Below is Old_Skeet’s market barometer report for the weekending January 5, 2018.
This week the barometer closed the week with a reading of 135 indicating that the S&P 500 Index is well into overbought territory. During the past year the Index has risen in valuation from 2239 to 2674 for about a 19.4% valuation increase while earnings have risen by about 13%. With this, investors are now willing to pay more for a dollars worth of earnings over what they paid a year ago. During the month of December short interest in SPY has moved from 2.5 days to cover down to 1.7 days. Indeed, stocks have become very bullish and with the new tax reform package becoming law they will perhaps become even more pricey. How high will valuations trend is anybody’s guess: but, for me stocks are currently very richly priced.
So what is Old_Skeet doing in this richly valued stock market? I am building cash and trading around the edges utilizing spiffs (special investment positions). This brings up my two market compasses. One follows the sectors of the S&P 500 Index while the other follows world regions along with a few other choices.
From my compass I pick the three best performance leaders, also known as the pack, for each compass. From the pack I pick the lead hound and open a position. As long as the lead hound can stay a member of the pack I leave money on it. When the hound falters and falls form the pack I pick another lead hound and repeat the process. Naturally, if stocks begin to pull back and the momentum is lost across the board I close the position(s).
For the S&P 500 Compass the pack consist of XLE (energy), XLK (technology) & XLY (consumer discretionary) with XLY currently being the lead & money hound. In my Global Compass the pack consist of GSP (commodities), EEM (emerging markets) & EWJ (Japan) with GSP being the lead & money hound.
Yes, stocks are richly priced (from my perspective) and looking to become even more so as we move through 2018 and even though earnings are improving stock prices are on an upper move much faster than their earnings growth.
Thanks for stopping by and reading.
I wish all … “Good Investing.”
Old_Skeet