A quick update, in case you are interested: In my view, yesterday MAY have been a significant reversal. It will take a few days to gain some confidence. The trades today are neither an adjustment for a further drop nor a repositioning for a new rally.
In Sector Selector ETF, we are trimming one of the S&P 500 sectors to buy a new one, taking advantage of signficant underperformance of late of the ETF we are adding. The trade leaves us still a bit underweight the new sector. I have spent significant time looking at the underlying names in the sector we are adding and find them to be attractively valued now after having been quite negative on the sector (in writing) when we launched the model in late April. In fact, what we are buying is down 27%, while what we are selling is down 12%. The S&P 500 is down 18% since then.
In Top 20, while I still find both of these names quite attractive, we are reducing a small Industrial and one of our Technology names. The former returns less than 50% to my target and is only slightly oversold. The latter returns about 65%, which is about average for the model, but it is one of our larger positions. The buys are both very oversold in my view. We are adding to our Energy name, which I believe could potentially double, and to a Healthcare name, which offers about 73% to the target. The markets have been extremely volatile, and these trades are attempting to take advantage to the extent possible.