October 2, 2023: We recommend the following changes to our Model Fund Portfolio:

With the technical data continuing to deteriorate, we are making another incremental defensive adjustment in our Model Fund Portfolio. Most notably, the bearish Distribution component of our Negative Leadership Composite is primed to plunge through the -50 level, indicating that stock market risk is rapidly increasing. As a result, we are recommending the following changes:

• Reduce the Industrials Select Sector SPDR ETF (symbol: XLI) from 7% to 5%. This step is being taken to further reduce the Model Fund Portfolio’s cyclical exposure.
• Reduce the Invesco Equal Weight Technology ETF (symbol: RSPT) from 4% to 3%. We are taking profits from this position to further limit our exposure to this non-defensive sector.

The Model Fund Portfolio now has a net invested allocation of 45%, with the remainder (55%) held in short-term Treasurys or a money market fund.