The November 30, 2013 AAR Strategy update is now available on the AAR Subscribers page. If you are not currently a subscriber and would like to learn more about the strategy, there is a detailed description on the AAR Strategy page.
The AAR strategy is a conservative, long-only, asset allocation strategy that rotates monthly among five large asset classes: large-cap U.S. stocks, developed country stocks in Europe and Asia, emerging market stocks, U.S. Treasury Notes, and commodities.
If none of the five candidates pass their respective trade filters, the AAR strategy remains in cash for the month. Stop-loss orders are used on every trade to control losses and to facilitate position sizing.
Brian Johnson
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Market Breadth Divergence Update
On Sunday November 17th, I posted an article that identified headwinds for the equity market. I explained that five independent leading indicators all pointed to near-term trouble for equities: a forming divergence in market breadth, an elevated CBOE Skew Index, a very low gamma-weighted Put/Call open interest ratio, an overvalued Price/Sales ratio and a plethora of overly bullish sentiment measures. The additional week and a half of data sheds some additional insight on the market breadth divergence and the other four leading indicators.
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