What. A. Week.   We have just experienced one of the quickest sharpest market declines in history.  Peak to trough, 15% in 6 trading days.  Needless to say, our ETF portfolio took a beating.  And, as timing would have it, our rules called for us to manage the international side this week, so the much larger domestic side went untouched.  If there is one thing we believe in, it is sticking to your rules.  Perhaps, if this was a real money account, we may have peeked at our domestic holdings.Anyway, no surprise management came with several liquidations on the international side.  We also found time to manage our delta neutral SPY strangles. That strategy hasn't fared well at all.  A constant grind higher followed by a massive explosion in volatility is not  what that strategy craves.  But, having a plan, and sticking to your rules is crucial in weeks like this.  We did just that, we rolled our strangles, some are now VERY inverted others are now straddles, but we keep on rollin'.  If we can extend duration, we have a fighting chance.  We have, and we do.... we hope. 

Watch today ( and Thursdays) video  to see exactly how we navigated the weeks storm with our paper money ETF portfolio. 

Our Relative Strength Wednesday produced no surprises.  D- Fence! ( clap-clap) 
Although, despite the strong correction,  when there is a bounce tech appears to be the place to be.  Every cyclical part of the economy, the sectors that signal a strong, expanding economy are lagging.  Hard.  Watch todays video for our complete RSW analysis! 

We've been seeing signs of this pull-back for weeks. Bonds & utilities were the tell.  Meanwhile the SPY, QQQ and to a lessor degree DIA have been overbaught for for sometime.  The market needed a breath.  How much of an inhale will the market take?  We use Chaikin Analytics  for the what we think is the edge.   Watch today's meeting to see what we were looking at in the face of an 80 point down opening. 

This week we are back to the .S. side of our simulated ETF portfolio.  The major indices remain strong, with Technology related ETFs containing to outperform.  Our only liquidation was a single tranche of XSD,  which we liquidated XSD to make room for or final tranche of healthcare related ETFs.   Watch  the video to see all out moves this week in or Simulated Portfolio.  Side note, no video for Friday.  We decided to let our current delta neutral positions go unchanged for another week. 

We are knocking the dust off after a long Presidents Day break.  Our Relative Strength Wednesday analysis showed a very narrow market. The strength in the market is found in tech, which  has become very overbought, and a few defensive sectors. namely, utilities and communications.  Also, there are several pieces of evidence that point to continued strength in the bond market.  Watch todays video for our complete Relative Strength Wednesday analysis. 

US Large Caps hit all time highs on Friday. But is bullish rated and bullishing trending SPY showing signs of fatigue as it hits overbought on the ob/os oscillator?  Though persistent, money flow is diverging from price, with smaller peaks at each new swing high.  Meanwhile, bonds are in the throes of intermediate term sideways price action, but a near-term bullish uptrend, oversold conditions and increasingly persistent money-flow might be foretelling some kind of pause for equities.  Bonds are relatively weak vs. the market in terms of price action, but I'm considering an in the money diagonal option trade on TLT - a tight stop under the Chaikin long-term trend for the long call and a covered write near 150 (March expiration) if price continues to move up tomorrow.  Just a small hedge trade. Not looking for bonds to explode.

Relative Strength Wednesday!  The take away from today's analysis is the continued Strength in tech, however we are beginning to notice sign of exhaustion in tech.  Utilities also showing strong RS performance,  the  XLU chart looks a little like a tech chart. 

Macor-Monday shows us more of the same.  Tech IS the market. However, some defensive sectors like Bonds, Utilities, XLV are gaining or remaining strong in the background. 

We noticed once again that the SPY Bull V Bear ratio near or at 3.0 tends to be a place of resistance.  We have been tracking the Bull: Bear for four years now, 2.5 - 3.0 is the spot where the ratio peaks before retreating, conversely .5 seems to be the downside  support. 

As far as the fundamental of the SPY Sectors, XLF  showed strong growth, despite the strength in bonds.  Energy remains simply ugly. 

 Mike's Macro-Monday Relative Strength comparison Reinforces our Macro-Monday takeaway.  Bonds, Gold and Currencies show a positive trend. 

Click to enlarge.