March 23, 2023: We recommend the following changes to our Model Fund Portfolio:

• Exit the Financials Select Sector SPDR ETF (symbol: XLF).
• Reduce the Energy Select Sector SPDR ETF (symbol: XLE) allocation from 6% to 4%.

The past few weeks have seen significant deterioration in the technical evidence, as highlighted by the reemergence of bearish Distribution within our Negative Leadership Composite (NLC). Additionally, the Federal Reserve is now being forced to walk a tight rope between persistent inflationary pressures and banking system turmoil, which greatly increases the odds of a monetary policy error.

Following these trades, the Model Fund Portfolio is now 48% invested with the remainder (52%) held in short-term Treasurys or a money market fund. These steps increase our already defensive position during this period of heightened risk and monetary conflict.