Market technicals have turned bullish, as price of the SPY (S&P 500) relative to the Chaikin short and long term trendlines has finally broken out. (Market Conditions) But fundamentals remain stubborn, as the ratio of bullish to bearish stocks according to the Chaikin Power Gauge remain
Chaikin Analytics provides valuable weekly stock and market analysis. Let's see how we can profit from this week's Bearish Stock of the Week using a high probability options strategy. Watch the video then keep reading and I'll show you how I'm trading it.
Here's how I'm trading a bearish Grub Hub put diagonal...
Despite a very choppy, sideways market, our current Chaikin Power User Portfolio is mostly in the green. We set stop losses just below the orange Chaikin Trend (2 ATR below), but only move stops up never down. We manage stops weekly. We buy stocks only when the Power Gauge reads very bullish, but we hold them through neutral rating periods. We sell if our stop loss is breached or if the Power Gauge turns bearish.
Our weekly deep dive into relative strength ratings of bellwether ETF's suggests that the US is under-performing developed Western country stocks, with the EFA leading the way.
The relationship between bullish and bearish stocks on the large cap index is worrisome. Driven by Chaikin Analytics Power Gauge, a mostly fundamental look at the underlying stocks in the S&P 500, the ratio is at one of the lowest points we've tracked in the past 2 years. Market technicals ALWAYS catch up with fundamentals.
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