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Adding an ETF to my portfolio

4/9/2016

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I did something  Friday we haven't done much of, added an ETF to my portfolio.  If you watched our video from Wednesday,  Mike and I found that the XME- Metals and mining ETF looked pretty attractive.  Rather than pick up one of the several stocks within the XME that have recently thrown buy signals, I decided to pick them all up by buying the ETF.   

The XME has rallied sharply this year.   Being an ETF we don't have the advantage of a Power Gauge Rating ( yet!  this feature is supposed to be released soon!)  We do have very bullish money flow along with positive relative strength.   Another observation in favor of the XME is the Overbought/Oversold oscillator is well within Oversold territory.   Of course, it can stay in the oversold range for an extended period, but I think this one is simply taking a breather.    
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One of the new features of Chaikin Analytics is the Sector Analysis.  Inside the platform, just click on Sectors to accesses it.  As I said, its new, so like you, I'm still learning it.   However I was able to see that the XME seen in the chart below in yellow, is now out performing the SPY, in purple, for the year.   
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So, why buy the ETF?   A number of reasons, one of which is headline risk...  I don't want it...  it's earnings season.  Also,  the money flow leads me to believe  there is some institutional buying happening.  And lastly, buy looking at the option chain, the market is telling up there is an expected move of 2.28 between now and May, of course it could be a move in either direction.... but I believe the trend is my friend here.  We'll see!   Happy trading.    

​-AA 

BOT +145 XME @20.46
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    About AA

       A career in  media and all I walked away with was this goofy nickname.  A veteran of the radio industry, I became tired of the insecurity of constant consolidation in an industry that has found itself in perpetual decline.  Like most, I began trading long stock, with mixed results.  I have since learned the value of selling premium against long positions, as well as selling premium with slightly more advanced option strategies like vertical spreads and Iron Condors.  I use Chaikin Analytics to identify both long opportunities and bullish and bearish opportunities to sell premium.  

    Thanks for following along at home.  I would love to hear from you. Please feel free to leave a comment in the comments section!  

    ​Happy Trading!

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