Terms: Net Market Positive, etc.

I am going to slightly revise my definitions for our market indicators.  I'm doing this so that they reflect on a more accurate manner how we use them.  I am changing these to the following below:

Net Market Positive:

Should be interpreted as :

1.} That we have over a certain period of time become net buyers of securities. That is on a net basis we have added more securities, {usually ETFs} to client accounts than we have sold. We may be both buyers and sellers during this given time but on balance we will have purchased more securities than we have sold. Such an action can be confined to one of our individual investment categories or it could possibly be something we have attended to across substantially all of our client accounts. We will not disclose what percentage of our client accounts such a positive bias accounts for except in extraordinary circumstances. We may also indicate whether we are Net Market Positive or Net Buyers of Stock in a shorter time frame or for a longer period of time but we will not be obligated to do so.

2.} That our investment indicators currently are or have become positive to a point that regardless of investment activity in client accounts, we believe the environment for equities or whatever investment class we are analysing is in a bullish phase.  We define a bullish phase as where on balance our money flow analysis indicates that on a net basis there are more buyers than sellers.  We may define this as a broad indicator of the overall market or a specific indicator to a certain sector or sectors of the market or even to individual securities.   

3.} We break down this analysis into three distinct periods of time.  These are short term indicators, intermediate indicators and longer term indicator.  There is no hard definition of these dates as markets are constantly changing, however a general way of viewing these different time frames is to say short term can comprise a period of time that is days to weeks, intermediate is weeks to months and longer term is months to years.

Net Market Negative:

Should be interpreted as:

1.}  That we have over a certain period of time become net sellers of securities. That is on a net basis we have sold more securities, {usually ETFs} in client accounts than we have bought. We may be both buyers and sellers during this given time but on balance we will have sold more securities than we have bought. Such an action can be confined to one of our individual investment categories or it could possibly be something we have attended to across substantially all of our client accounts. We will not disclose what percentage of our client accounts such a negative bias accounts for except in extraordinary circumstances. We may also indicate whether we are Net Market Negative or Net Sellers of Stock in a shorter time frame or for a longer period of time but we will not be obligated to do so.

2.} That our investment indicators currently are or have become positive to a point that regardless of investment activity in client accounts, we believe the environment for equities or whatever investment class we are analysing is in a bearish phase.  We define a bearish phase as where on balance our money flow analysis indicates that on a net basis there are more buyers than sellers.  We may define this as a broad indicator of the overall market or a specific indicator to a certain sector or sectors of the market or even to individual securities.   

3.} We break down this analysis into three distinct periods of time.  These are short term indicators, intermediate indicators and longer term indicator.  There is no hard definition of these dates as markets are constantly changing, however a general way of viewing these different time frames is to say short term can comprise a period of time that is days to weeks, intermediate is weeks to months and longer term is months to years.

Market Neutral:

1.} In general we are neither net buyers or sellers of stock. 

2.} That our investment indicators currently are or have become neutral to a point that regardless of investment activity in client accounts, we believe the environment for equities or whatever investment class we are analysing is market neutral.  We define market neutral as where on balance our money flow analysis indicates that on a net basis neither buyers or sellers are in control of the market or security we are discussing.  We may define this as a broad indicator of the overall market or a specific indicator to a certain sector or sectors of the market or even to individual securities.   

3.} We break down this analysis into three distinct periods of time.  These are short term indicators, intermediate indicators and longer term indicator.  There is no hard definition of these dates as markets are constantly changing, however a general way of viewing these different time frames is to say short term can comprise a period of time that is days to weeks, intermediate is weeks to months and longer term is months to years.

Now for the disclaimers!

These definitions are a work in progress. Such a system is not perfect, no generalization ever is. This is also not at this time meant to be seen as a market timing model nor as a blanket description of every portfolio. That is it will not be an audited event and we will not be in the business of grading its results. It is simply our attempt at giving our clients and friends a better grasp of our investment positioning at certain points in time. As I reserve the right to change these definitions should events warrant it.

Markets can be in different investment phases depending on the time period.  It is possible for example for us to carry a market neutral rating in the short or intermediate term while showing that longer term the secular indicator is bullish or bearish.

While we may in general from time to time review our current indicators and may either compare or contrast them to the markets and to past changes in said indicators we  do not use or represent these changes as a market timing mechanism.  You should solely use these as a way for you the reader of this blog to better understand the Investment Process of Lumen Capital Management, LLC.  If you are a casual reader of this blog, you should not construe these changes as a trading strategy that we employ across the board with all of our clients or attempt to emulate anything here as a personal strategy.  I have and continue to warn against this and therefore assume no responsibility if you ignore my advice.  In general we will also not discuss any specific ETF, strategy or any other security we might have purchased or sold.  If you want those sort of specifics you need to hire us!