Current Market Conditions
Aligning our trading to current market conditions is critical to our success. When the boxes below turn green and the OB/OS oscillator is oversold, it's time to trade!
- Market Up: When the Chaikin Analytics Power Gauge Bull - Bear Ratio for the SPY is above 1.00 and SPY price is above both rising short and long-term moving averages, conditions are favorable for multi-month bullish trend trades. Look for Very Bullish rated stocks in strong Industry Groups that are oversold and wait for a Buy Signal.
- Market Down: When the Chaikin Analytics Power Gauge ratio for the SPY is below 1.00 and SPY price is below a falling short and long-term moving average, conditions are favorable for bearish trades. Look for Very Bearish rated stocks in weak Industry groups that are overbought and wait for a Sell Signal.
- When the signals are mixed, we avoid multi month stock trend trades altogether. Our patience, trading only in favorable market environments. has been rewarded. When signals are mostly bullish, our posture is "Market Neutral - Positive Potential" and when mixed signals are mostly bearish, our posture is Market Neutral - Positive Potential.
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Bull Bear Ratio Chart
Global Macro-Monday Analysis
Every Monday, we take a snapshot of the global economy. Chaikin Analytics metrics give us a quick overview of the worldwide macro-economic investing climate. When ETF's like SPY and IWM are displaying mostly positive indicators, it can be a more favorable investment climate for American stocks. When bonds, commodities or gold show strength, investors may be hedged or taking refuge in ETFs that are negatively correlated with equities, so-called flights to safety. Sometimes US stocks fall out of favor and international or emerging market stocks take the lead. Other times investors react to global central bank policy and other macroeconomic trends reflected worldwide currency price action . This is where we can make sense of it all without flashing a degree in advanced economics. You can open and view this in a separate window.
Notes about the metrics:
Notes about the metrics:
- A macro ETF is in a "weekly" uptrend when the 10 week exponential moving average is above 40 week exponential moving average.
- A macro ETF is in a "daily" uptrend when the 10 day exponential moving average is above 40 day exponential moving average.
- A macro ETF is in an "hourly" uptrend when the 10 hour exponential moving average is above 40 hour exponential moving average.
- Moneyflow is considered very bullish or very bearish when the ETF scores above .25 or below -.25. Between .1 and .25 or between -.1 and -.25, Money Flow is simply bullish or bearish. Money flow between -.1 and .1 is neutral.
- The rank is the relative price performance in each time frame of the ETF relative to all other price return data for every ETF in the group the group. An ETF with a rank of 1 in the 6 Month column means that it has outperformed every other ETF in the group for total % returns in that time period. We can compare macro ETF ranks to the SPY or ACWI to get an idea about how strong each is relative to major indexes. Paying attention to differences in price rank across various time frames offers clues about which parts of the world economy are rotating into favor and which are falling out.
- For bullish traders, green is good. An ETF is trending positively across multiple time-frames, with strong money flow and relative price performance. For bearish traders, red is good and for similar but opposite reasons
Sector Trend forecast
The Power Bar differential is the ratio of bullish/very bullish to bearish/very bearish stocks in each Sector ETF. Since it's based on the Power Gauge rating of each constituent stock, a metric that's 85% fundamental and only about 15% technical, the trend helps us anticipate where money is likely move next. Think of it as good predictor of future relative performance over the upcoming 3 - 6 month period. It's our forecast, updated every Monday.
Sector Relative Strength
Every "Relative Strength Wednesday'", we take a top down approach to the markets using Chaikin Analytics. We identify the trend of the market, then sectors, then strong industry groups and finally strong stocks. This chart reflects far more than recent past price performance and is different from our forecast above. Each sector ETF receives points for the following:
- Price performance relative to the broad market on a one, three and six month basis
- Powerbar Differential - the higher the ratio, the higher the score
- ETF Power Gauge - more technical, and takes into account the past year-long trend.
- Trend Strength - points awarded for bullish direction of the short and long term Chaikin trend and the strength of the trend as measured by Money Flow.
This is our beta look at US sector ETF's using mostly technical metrics. It lacks the proprietary Chaikin fundamentals derived from the Power Gauge or a definitive overall score and ranking. This is more of a peak under the hood for trend, money flow and performance ranks across multiple time-frames. We update this chart every Monday.