Today was the last trading day for the month of October 2012. Time to take a look at look at the month end closing prices for the ETFs that make up the IVY timing model and see if any actions need to be taken. Sorry for the delay in posting these but with the markets being closed the last 2 days many of the updates I monitor have come at the last minute.
At the end of October one new signal triggered. DBC closed below its 10 month SMA thus triggering a move to cash for that part of the portfolio. This is what is known as a false signal in the model. DBC triggered a buy only two months ago and now has triggered a sell. This is nothing to be alarmed about and is part of how the model works. This effect is non optimal but is unavoidable and just part of implementing the model. Depending on your buy prices for DBC from the end of August signals this trade will generate about a 4% loss for these 2 months. Also, on a tax note you can use this loss in DBC as a short term loss on 2012 taxes. This is part of a tax harvesting strategy which I’ll discuss in more detail towards the end of the year.
On an up note for this month, the other trade that was triggered in August, long VEU, is doing well an up about 4% since that time.
Full Disclaimer - Nothing on this site should ever be considered advice, research or the invitation to buy or sell securities. These are my personal opinions only.