The largest bull, bear ratio we have seen to date. more than 4.5 bullish to bearish SPY stocks. Bullish fundamental scores on 10 of the 11 SPY sectors. In the context of a bullish market, we noticed a few cautionary technical data points. Including wide-spread negative money flow. We may be seeing some early rotation in Mike's RSMK analysis. Although, the shortest timeframes are less meaningful to us, we have yet to see much rotation via the RSMK creep into the timeframes that matter to us.
It sure looked bleak for our tech holdings on Thursday, but our plan rules kept us from selling semis, software and services and innovative tech. Even though the Nasdaq had fallen below its 50 day moving average, the Power Gauge turned bearish and a number of key individual stocks had broken down, for time frame in which we trade, this was a normal, every day intermediate term pullback which happen during a multi month rally that had delivered over $100,000 in unrealized gains in a single quarter in 2021. Watch us manage the portfolio using a combination of Chaikin factors and relative performance vs. SPY
This week's portfolio moves: we reduced our holdings by 1/2 in $COPX and $EWY. We added to our existing $IWM, $IWC and 4UGS positions. We initiated a new position in $ECH.
The Weekly Relative Strength Chart's you have gotten to know are updated for the week below. Once again to start the week, we didn't see any significant change in most of the metrics we track. However, we were starting to see technical evidence that led us to be a bit cautious. Technical evidence, including what we have found to be a fairly reliable indicator, divergence in the Chaikin Oscillator. We also noticed most of the SPY sectors with money flow in the negative. The last chart below is Mike's RSMK chart of the week. This week we highlight the commodity chart. Several of the previously high flying commodities had a rough week, last week. Of course, one week a trend does not make! However, we feel the move in commodities has been an important part of the market as of late, and should be watched closely.
Every week, we compare and rank ETF's using the RSMK indicator (named after it's creator Markos Katsanos). We watch for patterns of increasing or decreasing relative strength. The relative strength trend across various timeframes is something we find particularly useful as trend following traders with a "weeks to months" time horizon favored by the Chaikin Analytics model. We use relative strength when evaluating the soundness of the price trend of a stock. Look at the AAXJ, an exchange traded fund that tracks the performance of Asian markets outside Japan. This security had been showing persistent strength, ranking near the top of our global macro ETF comparison chart until it began losing steam a couple of months ago. It's relative strength trend slowed before its price trend slowed-- signaling to us at the time that a period of consolidation or, worse yet, price mean reversion was ahead. In fact, the moving average tracking we incorporate on the right side of our comparison charts confirms bearishness now in two of the three time frames we pay attention to (including the 20 day exponential moving average having crossed below the 50 period exponential moving average) . Relative strength analysis gives us an idea of "where the puck is going." We want to enter areas of the market that are not only outperforming but where price performance is accelerating on a relative basis. As I write this, the AAXJ seems to have completed its intermediate pullback, and while price is still struggling below its 50 day moving average, it's relative strength rank improved week over week. We'll watch for weekly relative strength gains to take AAXJ above the SPY, and we'll likely purchase a top Asian country ETF once price retakes the 50 day moving average.
Global ETF Snapshot - Bullish WorlD-wide Reits