Here are the fifteen best, most liquid ETF's right now on our bullish ETF watchlist.  On Macro-Monday's trading video, we'll show you how we use Chaikin Analytics to weed through thousands of ETF's to arrive at these choices.  Commodities (from agricultural to energy related) and the companies that mine, extract and refine them, US Banks, Asian countries, particularly with economies that produce and export tech - like Korea and Taiwan and small and medium sized businesses in the US likely to survive and thrive thanks to government stimulus and Fed funny money are where we are looking to put our money to work. 

From the list above, Invesco runs the Very Bullish rated ETF TAN, which consolidates publicly traded companies across the globe specializing in the solar energy space. TAN has been a Chaikin classic bull since the stock market hit its COVID low early last spring, price action for which having gone parabolic after the Democrats secured the White House and the Senate during the past two months.  The ETF has recently pulled back to an oversold level (with only a small blip of accompanying negative money flow and continued positive relative strength).  We can make educated guesses about where the stock is likely to find and bounce off support, employing risk controls through position sizing OR we can simply get paid while waiting as the ETF consolidates and possibly resumes its uptrend. 

That's at the heart of a put selling strategy, where the goal is to acquire the stock at a discount from current market prices. After a long uptrend, price can flatten out for several months before marching higher.  This gives the trader the chance to book income by selling each month as she attempts to have the market "put" the stock to her at a lower price.  With earnings season on the horizon and implied volatility increasing as a result of the uncertainty associated with quarterly earnings reports,  inflated option prices make selling a more attractive strategy than buying when making a directional bet. 

Because our capital is not riding on the performance of any one company during earnings season (which can result in huge moves when quarterly reports deviate from analyst consensus expectations) put selling risk is diversified and gives us the chance to acquire TAN at below-market prices without losing sleep at night. The Chaikin Very Bullish Power Gauge is another important comfort-inducing metric, since fundamentals contribute to the overall PG rating,  A very bullish rating implies that Solar Companies are priced reasonably with expectations for future net earnings growth and cash flow.  I'll walk through the process during our trading meeting,  and we'll discover together whether selling out of the money puts on TAN.

Our Macro-Monday analysis once again points to a very bullish market. Late stage trends continue to emerge, specifically rising commodities and oil.  We are also watching the rising yields closely.  Watch todays video to see how we use Chaikin Analytics to develop our 30,000 ft view. 

Focusing on relative strength in the market, to outperform our benchmark ACWI.   We use Chaikin Analytics to stay on the most bullish side of the trade as we can.

In todays relative Strength Wednesday, we see an intact bull market, perhaps late stage with the rally in commodities.  Small caps continue to push higher, as do yields.   For the first time since March, yield on the 10yr rose above 1%.  Watch todays video to see how we use Chaikin Analytics to quiet the noise and help use develop our market posture.  

Pre-market we met for our weekly Macro-Monday meeting.  The only notable change prior to todays sell-off was the elevated price in precious metals. Our weekly analysis continues to suggest very bullish conditions.  The current bull, bear ratio on the SPY remains 3.0.  The longest stretch above 2.0 we've seen since we started tracking this metric more than 6 years ago.  Watch todays video to see how we use Chaikin Analytics to get a 30,000 ft view.   Join us Wednesday for our Relative Strength analysis. 

 Our ETF portfolio ends the year at nearly $521,000(paper money)  In our final trading meeting of 2020, we managed the international and macro side of our simulated portfolio.  On the macro side, $TAN and COPX have been huge winners for us.  We recall buying them thinking we were about to get whip-sawed, but following your rules, holding your nose and sending the order works out. We continue to liquidate the $QQQ position that is part of our Country one holdings. Relative Strength in the Q's vs our benchmark, ACWI  continues to under-perform, so we continue to liquidate.  We also force liquidated our 4XLY position in order to make room under our cap for our one addition this week.  We added 1 trance of $GBTC, a bit coin ETF.   Another one of those times that we think we will get whip-sawed. Once again,  we are sticking to the rules, holding our nose and sending the order.  We'll see.   Thanks for joining us and exploring the Chaikin Analytics App in 2020! Look forward to whatever Mr. Market has in store for us in 2021. 

Our macro-Monday relative strength analysis across the globe gives very few indications that big money is positioning defensively ahead of any impending bearishness.  Rotation into commodities is usually the last act in the the play before investors begin embarking on a longer term course correction.   And that's most certainly what we're seeing as investors looking for investment returns in dollars. 

Latin America holds its persistent relative strength compared to rest of world (ROW), even against a weak dollar (UUP) and stronger SPY, which appears to be regaining relative strength rank over the past four trading weeks after a period of large cap stock consolidation.  Very Bearish rated China (FXI) continues its relative weakness vs. ROW, and since it's 40% of EEM, some relative weakness has now crept into emerging markets over the past eight trading weeks.    TLT remains weak relative to to US large cap stocks (SPY), developed economy stock markets outside of the US (EFA) and global high yield corporate bonds (HYG).  It's a weak dollar market with very little appetite for defensive names.  Signs of bullishness are everywhere for global stocks. 

Once we add commodity stocks and US small caps (IWM) to the analysis, the late stage bull market picture begins to emerge.  Relative strength in Copper remains persistent.  Emerging strength in oil (USO) and ag (DBA), a return to strength for precious metals (SLV and GLD) and overall rotation into into the broad commodity basket ETF DBC, are all priced in dollars and tiered just above stocks in terms of relative performance.  Price action is bullish with market participants positioning for more gains to come. 

When we sharpen the focus and consider only US sectors, other than a one month bounce up in relative strength of healthcare stocks (XLV largely driven by improved recent price action in biotech and health care equipment stocks), we're just not seeing rotation into traditionally defensive areas of the market like staples or utilities.  Other investors are likely looking for holes in the market, just like we are.  In today's video, in addition to reviewing the price action and relative strength of different silos in the global economy, we use the power of Chaikin Analytics, which includes quantitative fundamental metrics to improve our trading accuracy.