The markets have had two very strong days in a row, one of the investors in DMS strategies wrote me this afternoon, replying to the email I sent yesterday in which I said I will follow the strategies, if they say Treasuries then I will go Treasuries. He commented today that while the markets may not have gone up quite enough to keep the strategies in equities - he is, and making a deviation to the strategy signals and staying in equities.

I mention this, because I understand that it can be difficult for people to follow the signals because of the circumstances. I got curious and went back and looked from 1980 through 2021 at every 1st month the LT Gain 2X strategy went into TLT but filtered it when the weighted lookback was less between -1.5% and 0% as it is at the end of January 2022. The results are that you would have been much better off going to Treasuries instead of staying in the market. The past events do not give us certainly to February 2022, only that in the past we would have been better sticking to the signal.

I trust the strategy signals better than my gut, and quite honestly I am ambivalent about February 2022 market performance, I have no idea what February may hold for equity performance one way or the other. We have earnings still being released, the Fed is raising rates soon and I don’t know those and other factors will ultimately be digested by Mr Market.

However you position yourself for February, I wish you the best outcome! I’ll be following the strategies, my wife tells me I am so literal - maybe so.

The full deck can be downloaded here.