It’s clear that we are currently in an environment of frothy valuations. The insiders are finding this a very good time to take a lot of money off the table.

Wall Street Financier firms such as Blackstone Group LP and TPG Capital Management, Apollo Global Management as well as, other major players have been capitalizing on record stock markets around the world to sell shares, mostly in their companies that have already gone public. So far this year, private-equity firms sold $73 billion of their buyouts to the public, a record amount over a six month period. These guys are pretty astute about timing their exits. Basically they are accelerating monetization of companies they own.

Other big reason is that many of the larger companies that were scooped up during the buyout boom which ended in 2007 have already gone public. Today’s selling is largely private-equity owners getting out of those assets.

This week’s quick refresher on our trading systems is about our “Portfolio Plan Systems,” explaining the US Bond Sector Portfolio.

Logistics of our US Bond Sector Portfolio system:

The goal of this portfolio system is to create a steady stream of income, with equity-like rates of return, and capital appreciation. The U.S. Bond Sector Portfolio is a dynamic and unconventional system which is always evolving as it does not consider price. It is also not affected by major world events such as the Greece drama. It takes the unbiased true supply and demand of the broad market to determine not where price is but where price is headed in the future and the probability of it.

  • In contrast to signals based on price movements, which all other system traders follow. Looking at volume and recognizing when certain bond types, duration and quality are coming into favour by large institutions enables our system to identify what bonds to be invested in at any given time.
  • The average hold period in trades with U.S. Bond Sector Portfolio is approximately 4 months, with three to six trades per year being the norm. Occasionally, trades can last longer depending on market conditions.
  • Well-known U.S. mutual funds and money markets are the instruments used to trade. Alternatively, you can trade the comparable Exchange Traded Funds as well.
  • For every trade published there are three mutual fund symbols that you can choose from. These funds cover 99% of the custodians that might be used by investors.

When Equity Sector Portfolio and U.S. Bond Sector Portfolio systems are used in tandem they can provide a diversified and low risk overall portfolio investment approach.

Signal Pages Snapshots

US Equity Sector Portfolio Signal Page

Cashed out of all positions today at closing

Symbol Sector % of Portfolio Entry date Entry price (at close) Latest Closing $ Gain / Loss to date % Gain / Loss to date Action
IJK Mid-Cap Growth 34%  06/24/2015  $172.26  $169.63  -$2.63  -1.5% CLOSED
IWM Russell 2000 33%  06/24/2015  $127.92  $123.74  -$4.18  -3.3% CLOSED
IJT Small-Cap Growth 33%  06/24/2015  $134.02  $130.66  -$3.36  -2.5% CLOSED

US Bond Sector Portfolio:

In Cash

Index Trader systems, (The short term trader):

Presently in Cash/Money Market

The key as we have mentioned before is short seller activity at the lows where they are covering their positions and end up being the rocket fuel to launch the strong upside move. If such an advance fails to produce a strong upside bias, we could see a pretty strong reaction to the downside afterwards We could potentially be in for something like what we had leading to last year’s October low. For now, we are looking for strengthening breadth numbers as a confirmation that shorts are exiting. Until then, be aware that a re-test of lows could still happen as cycles are only bottoming, and not rising yet.