Join us for Relative Strength Wednesday.

Relative Strength Wednesday shows us that EVERY sector has delivered positive returns in the previous 1 month. Even energy has generated positive returns in that time. Even when we look to the three month  period only one sector remains negative, Consumer Staples.  Power Gauge ratings remain defensive as utilities remain the only Very Bullish rating, along with health care, staples and real estate grabbing bullish ratings.  Industrials also move to bullish, led mostly by aerospace which has delivered 14% in the past month.  Looking for Chaikin buy signals in the three leading subsectors( 1 month returns; XSD,XITK,XAR)  proved difficult. 

YY, part of the XITK, was the lone buy signal and not one we would take. Our rules dictate the negative money flow automatically disqualifies us from entering a bullish trade.  So, we'd pass.  Sometimes sitting on your hands is the prudent thing to do.  We feel today is one of those days. 

The Bull Bear ratio starts an abbreviated trading week at a bullish level last seen late September 2018.  Now greater than 2.5 bullish : Bearish stocks in the SPY.  Curious to see if the ratio forms a lower low once again.  Curiosity aside, this six week move has been incredible.  

Along with the most bullish ratio since the Q4 pullback, we also see  " The Bugle" as we call it, at it's widest and most bullish point.  As industrials has beat out utilities as the holding the highest bull / bear ratio this week.  With 69 names in the XLI, 15 are bullish, 54 Neutral and 0 bearish. With XLI & XLK returning to a bullish ratio, we may be seeing the beginning of another rotation, one that may be less defensive.  One week does not a trend make.  You can follow all our market conditions weekly on the MARKET CONDITIONS page. 

Wednesday we will post a short video for Relative Strength Wednesday. 

Today we managed our ETF portfolio, powered by Chaikin Analytics.  Here are the trade we made, following our rules

The SPY Bull / Bear Ratio continues to improve, now approaching 2. Technically, we remain above both averages, positive money flow and the OB/OS oscillator has once again turned higher.  The 200 SMA is putting up a bit of a fight, as the market tries to continue its march higher past 2746 ( SPX).  After a brief tour of the markets we manage our existing positions in our simulated ETF portfolio today.  We continue to hold both long and short positions, exposure to both sides of the market. Today we will find out what, if anything, meets our rules of liquidation.  

Watch our Thursday video HERE

Relative Strength Wednesday trading video here.  This is a complete end-to-end implementation of the Chaikin system leading to a trade, including position sizing and stop loss.  If you want to learn how to maximize the fundamental and technical tools in Chaikin Analytics for and manage the trade off between the probability of success and reasonable risk, this is the video for you. It's been a while since we've done a full top down market analysis leading to a trade. $CWCO is an example of a personality change -- a little higher risk but the reward is a trend that could last months or even years. 

The SPY Bull / Bear ratio continues to improve, heading back towards the 1.50 area.  However, the SPY does have the 200 day SMA to break, while at the same time the OB/OS oscillator is retreating.  It seems a pull back is in order before another possible run at the 200 day.    Such a pull back may be just shallow enough for the OB / OS oscillator to fall to, or below, the 30 line.  We'll have to wait and see.  

Sector rotation and our sector Bull / Bear ratio chart continues to favor defensives,  however, a deeper dive reviled some less defensive leading sub-sectors.  Lets not forget about bonds.  Bonds continue to show strength, in today's video Mike points out a bullish chart pattern on the /ZN futures that could be pointing to high bonds prices and lower interest rates.   LAstly, in today's video we manage our various option positions and go over a new  option strategy we are going to test using the Chaikin platform alongside our own set of rules. 

Watch our Monday video HERE

Friday we added to our long-term ETF portfolio.  The market is still telling us to be defensive, with leveraged shorts, precious metals still meeting our rules. We  added China to our country one portfolio, as well as several country two positions, some completely new others we added to existing positions.  Our "Macro" positions our decidedly pointing to defense with metals, bonds, shorts and Dollar. 

Here is what our simulated ETF portfolio looks like now.  Keep in mind, we started this experiment just before the market turned south in early October.  Using Chaikin Analytics and our own set of rules, we managed to overt what could have been a rather large draw down. 
You can following along and see us put our acquisition rules to work by watching our Friday video HERE