House of Cards

Risk Model: 3 out of 5... Beta Up

Netflix will be issuing season five of the blockbuster series, House of Cards, this month and the trailers looks suspiciously like a combination of C-Span and Fox News.

A megalomaniacal President, played by Kevin Spacey, looks to create a permanent presidency that is effectively a dictatorship. Art imitates life.

Last week's market response to the flash correction in the VIX was remarkable. It offers proof that the active manager has set up his portfolio to expect (there's that word again!) a market correction. The collective grasping at straws that occurred on Friday has left the Bears whipsawed.

What these two things have in common is that the rotation from the reflation trade to the TINA trade was reinforced. Teflon Trump seems to have pushed off a reckoning. Bond yields dropped, causing flows into yield replacement stocks like Utilities and Staples. Risk capital continues to fade the Trump cyclicals and herd into the Tech leaders like Netflix.

The Risk Model is back to it's long position.

We are still waiting a durable rotation. The Inflation trade seems a long way off. Given the current market mindset, we are on the sidelines for watching for an evidenced based entry point.

The House of Cards market continues to roll on.