Once again this week additions to or paper ETF portfolio were all energy related. Meanwhile, liquidations of long-time holdings continued. We said goodbye to half of our position in $EPI, as well as $EWN & $EWT. As energy and commodities continue to outperform on the 3 and 6 month basis we added to our positions in $DBC, $UNG and $RSX. Despite energy's clear outperformance in the 3 and 6 month periods, we somewhat concerned by the weakness being shown in $XLE as perhaps a warning flag. Nevertheless, we stick to our rules and make our buy & sell decisions based on 3 and 6 month relative strength.
Market rotating defensive, with utilities healthcare, staples and treasuries all near the top of the stack (but only short term lookback periods). If persistently strong tech earnings trigger a "sell the news" type of market reaction, we could see a pullback. Is the Russell 2000's persistent market underperformance a clue?
On the other hand. The SPY is trending above rising short and longer term Chaikin moving averages, money-flow is solid and the OB/OS oscillator is curling higher. "Market Up" conditions. Watch the oscillator, if it rolls over before it gets to the overbought zone, market weakness could follow. The persistent money flow says don't count on it, though.
What a week in the market. An early week sell-off was erased, for the most part, by weeks end! We did see a week over week draw-down in our paper ETF portfolio, but we stick to the rules and and don't panic. After starting this experiment back in October of 2018 we have traded through several multi-deviation moves. And while we may have been a little too conservative getting back into the market, our rules kept us from being wiped out, which is most important. Always live to play another day!
This week saw several more liquidation's from our portfolio. including the remainder of our homebuilders, $XHB. We also let go of a lot of our energy holdings as relative strength against the ACWI told us too. We liquidated half of our positions in $XLE, 4XOP and also in metals, $XME. We felt good about lightening up in energy, since we are quite heavy in energy in our macro holdings.
This week our rules led us to replace our liquidations with tranche 's of $XLF, $XLRE, $XLC, $XRT and $RWR.
Watch todays video to see how we use Chaikin Analytics alongside our own set of rules to manage a paper ETF portfolio.
This week we managed our country level 1&2 holdings as well as our macro portfolio.
While we had no liquidations in country level 1, France is close to hitting a liquidation trigger. We added to our Canada ($EWC) holdings, and sat with our France ($EWQ) holdings.
In country level 2 holdings, we were forced to liquidate half of our position in Netherlands ($EWN) as 3 month RS performance fell more than 1% below that of the $ACWI.
Lastly, we liquidated our remaining copper position ($COPX) and right sized a heavy position in $UGA
It is becoming noticeably difficult to find ETF's to add that meet our rules. This week, with plenty of cash to put to work, We added in $EWC, $RSX, $UNG, $DBC. All of which are very obviously tied to commodity prices, most specifically energy. The concentration of the additions makes us a bit nervous, but we follow our rules.
Watch todays video to see how we use Chaikin Analytics alongside our own rules to manage a simulated ETF portfolio.
Despite the turbulent week in the market, we follow our plan and our rules. Our paper ETF portfolio is off of it's recent highs, and we have plenty of cash to put to work. Our rules and allocation limits has kept our cash holdings higher than recent in recent weeks, which is great. We remain a little under invested, which seems to be the right move, so far.
This week our rules pushed us into liquidations of $XME, $KRE and $XTN.
Although RS and outperformance pushed us to add to our energy holdings, our allocation limits kept us out. Instead we added $XLRE, $XLC, $XRT, $KCE
Watch todays video to see how we use Chaikin Analytics alongside our own rules to manage a paper money ETF portfolio.