About Bill Zimmer

See About at prudenttrader.com

11.7.16 Market Overviews

Asset Class Overview 


 Market Commentaries:

Sector Watch 



Morningstar Legacy Sectors:


Market Overviews

For the benefit of newer members, I am in the process of building a new home and we are currently in a rental about an hour and a half drive away. The schedule has us closing and moving mid to late December I will therefore be quite busy out side the market place.  In order to satisfy member needs I have created a new Google spreadsheets and live charts.

The links will be in the nightly email and not on site. Let’s take a look, first the data produced: Data from Friday 11.4.16


These are our asset classes; changes today, a rolling week (5 days) a rolling month (21 trading days) and year to date. Along side the data are links to good daily market commentary, written much better than I am able. Underneath what you see will be the SPDRs and the Morningstar Legacy sectors:



If you look at both the Asset Classes and the SPDRs there are links to Charts. The Asset Class charts appear on one page and may take a few minutes to load depending upon you computers speed and your internet connections Speed.


These charts will update during the day. The SPDR Charts are the SPDR Composite charts that are there every evening.

Hope you enjoy this new method which can make life even easier on all of us.

Prudent Trader Non-Member Weekly Update

November  4, 2016

It does not matter how slowly

you go as long as you do not




  • Investment Changes
  • Recessions, Predictions and the Stock Market
  • Money Flows
  • Asset Class Performance
  • Sector SPDRs
  • Morningstar Legacy Sectors
  • Fidelity Select Funds
  • Risk Analysis
  • Late Additions

Investment Changes

One secondary model change this week, see picture below showing (Cash) position.


Portfolio adjustments take place on the first trading day of the month. Review the monthly Investor letter sent out November 1. Positions, if any, are only adjusted at the beginning of the month. They may or may not change at that point in time.

Recessions, Predictions and the Stock Market

This weeks snippet comes from Pater Tenebrarum in an article with the above title.

Investors as a group cannot be saved from suffering the losses a bear market inflicts, only the distribution of these losses is open to question. Per experience, only very few investors will actually be able to sidestep a bear market or even manage to profit from it.

This small group of investors will mainly do so by successfully predicting or recognizing a downturn that the vast majority of market observers will swear is nowhere near. In short, one has to adopt what will appear as a contrarian position and do so in a timely fashion; while this is a tall order, those who wait for official confirmation of a recession will have waited too long.

An alternative to making correct forecasts is to use a trailing stop or some other type of systematic approach to time exit and entry into the market. To simply hold on in the face of excessive valuations and excessive credit growth “because there is no recession” seems a very risky strategy by comparison.

Take a few and read the rest of the article HERE!

Money Flows:

Money flows have been decidely negative for most of 2016 yet the markets as measured by the S&P 500 remain within 4 or 5 % of their all time highs. Seems like everyone is attempting to exit at a percieved top. When was the last time “everyone” was right?  😉

Lipper Analytics Money flow for last week.

  • $3.4b outflow from equity funds/ETFs this wk. Negative 37 of past 44 wks
  • $7.7b outflow from taxable bond funds. Positive 32 of past 44 wks

Jobs Report

October Employment Report: 161,000 Jobs, 4.9% Unemployment Rate. More detail and analysis at  Calculated Risk blog 

More from Ben Casselman, economics writer for fivethiryeight.com

  • Average hourly earnings rose 2.8% in October from year earlier, fastest growth since 2009.
  • labor force participation ticked down, though still up from a year ago.
  • Year-over-year pace of job growth continues to slow, especially for the private sector.
  • Things are looking up for the unemployed — one in four found jobs in October for second straight month.
  • Remember: Essentially all of the employment growth in the recovery has been full-time.

My personal investing philosophy is to have a methodology that is suitable to you; your goals, your psyche, and financial condition. We have a simple monthly exchange philosophy that requires less than 10 minutes a month to execute, or we can refer a financial adviser who will execute it for you.

The primary reason I give non-members a means to follow our progress is simply because we wholeheartedly believe in what we are doing, this will hopefully make you at least somewhat comfortable prior to subscribing.  I just ask that you do not read too much into the day to day, or very short term fluctuations, they are noise within our methodology. The non-member page is <here>, positions are blackened out in deference to paying subscribers but not the performance year to date and historically.

Bill Zimmer – PrudentTrader.com

I believe it was Bernard Baruch who said something to the affect; I leave the first 20% of a move to someone else and the last 20% of that move to yet another party. I am perfectly happy with the middle 60%. 😉 This is our goal!

 Asset Class Performance:

Click pictures for a full sized image!

Three up and 5 down this week. Three of the eight are up on our rolling month look and 7 are better on a year to date basis.


Sector SPDR Performance


All of the SPDRs declined this week, only one is ahead on our rolling month look (21 trading days) . 9 of the 13 (69%) are still up on the year, 3 by double digit percentages. This compares to a 2.3% gain in SPY.

Morningstar Legacy Sectors

This gives us just a little more detail on the sector activity.


26 of the 31 Legacy sectors are still up on the year.leading; Redacted for members only not necessarily in that order. Nine of the 31 are still rated Overweight (OW) by our relative strength analysis and only one Redacted is showing signs of accumulation In other words there are plenty of actionable ideas in the above data.

We have begun a new project to help you produce alpha. I have taken the top 2 ranked ETFs, based upon our Monthly Letter and the Top 2 Morningstar Sectors based upon the same analysis. I then look for the top 4 component stocks for each. This month I have added the same analysis for capitalizition weighted indexes. They are kept in a Google  file HERE!

Fidelity Select

Top 5 performing Fidelity Select Funds for the week. Weekly changes do not effect our Fidelity select holdings. There are no investment changes from the Monthly Investor letter.


Risk Analysis

Whether you are a trader or an investor, you need to understand risk. Risk first, rewards second

Our risk profiles take the difference between the current price of the asset class and where our exit signal lies. Remember the performance is gauged on the Primary signals only. Secondary signals are early (and do not always lead to a primary change in tend) they are intended for aggressive investors only.

Our methodology involves a bull/bear line that will move up with the markets. The line will often be flat for awhile as it takes volatility into account. When the market moves up but the line remains flat the risk of entry obviously increases until the bull/bear line moves. That should be straight forward.

PrudentTrader’s Asset Class risk profiles (11.04.16): 


Recently I have written about the electronics sector also known to many, as semiconductors. Semiconductors make up a good portion of the electronics sector but not all. Notice how the bull/bear line gave way in 2009 and has remained bullish ever since. This sector is approaching the 61.8% retracement of the 2000 top to 2008 bottom. Usually stocks and markets tend to pull back from major Fibonacci lines after the pause this sector could have a lot more to go.


Remember the portfolio risk is the risk above times the percent of portfolio invested in that asset class. Therefore a 16% position risk (1/6) commitment times a 19% position risk equals 3.04% overall risk to the portfolio. If that risk is more than you are willing to accept; reduce your position size or hedge, perhaps with options.

Late Addtions  [Opinions of Others]

The 10 Things We Fear in Markets

Have a look around the web — even when it isn’t Halloween — and you will see headlines that seem to be designed to frighten investors:

“These Are the Scariest Charts…”

“3 Reasons Everyone Is Spooked…”

“Fright Night at the Stock Market”

“Inflation Fear Fuels Bond Rout”

“Fear and Uncertainty in Cattle Markets”

These clickbait headlines should be little more than a distraction to investors.

But they lead us to an important aspect of markets: What do investors fear — and more properly, what should they fear? Let’s look at some of the more common fears that now haunt Wall Street traders. Here is my top 10 list:

  1.  A (fill-in-the-blank) administration.
  2. FOMO. Fear of Missing Out
  3. Underperformance.
  4. Recession.
  5. A less accommodative Fed/higher interest rates.
  6. China.
  7. Earnings.
  8. Career risk
  9. Hyperinflation
  10. The unknown

Get all the details of each of the ten plus more. Continues HERE!

 Four Things I Learned from the Book “What I Learned Losing a Million Dollars

The investment industry is short on three things:

  • Humility
  • Simplicity
  • Introspection

The book What I Learned Losing a Million Dollars has all three in spades. It’s one of the best investment books I’ve ever read, regardless of what kind of investor you are – trader, indexer, venture capitalist, doesn’t matter.

Jim Paul and Brendan Moynihan tell a story – self-described by the book’s title – about the darker and honest side of investing. It is full of succinct lessons on risk that anyone handling money can benefit from.

Here are four things I learned.

  1. We systematically overlook luck’s role in investing.
  2. Winning is overwhelmingly a mastery of losing.
  3. Everyone is emotional. But some people learn how to deal with their emotions better than others.
  4. Crowds are more powerful than we think.

The full article for more detail on each HERE!

Till Next Time! 
Bill Zimmer