Wednesdays big post-Fed rally pushed the Bull / Bear ratio above 1:1, Our Bull / Bear ratio chart once again shows a retest of the ratio lows, as it has done during each pull-back since we began tracking. Although the market ate up Jerome Powells statement rallied hard, there are still some red flags that warrant continued caution entering new positions. After a brief look at the markets, pre-open, we manage our long-term portfolio and determine if we need to lighten our holdings. Video HERE
Are we three days into what could be THE Santa Claus rally? Or is this simply a bear trap setting up another market leg down. Who knows? We'll let people smarter than us (or better connected to insiders) trade binary events likely to move the market such as Powell's speech today or the China-US trade discussion coming this weekend. We'll stick to our discipline of assessing relative strength in the market, powered by Chaikin Analytics. Video Here.
Late last week, we managed the US domestic equity side of our portfolio. We'll briefly recap the moves we made in today's Macro Monday trading video. Video Here. Here's where the sector/subsector portion of our portfolio stands.
Prior to this mornings open, our net liquidating value is $497,432. (Original Investment $500,000)
Relative Strength wednesday
Relative Strength Wednesday has once again underscored the markets defensiveness. With bullish sectors, such as utilities, health care and staples all out performing the market, we will concentrate on those areas when we meet Friday to manage our long-term portfolio. Technical indicators are also a part of our new strategy, we will review the technicals Friday morning, as many different moving averages are converging on the major induces, with RUT already putting in the "death cross" on the weeklies. You can watch todays Relative Strength Analysis HERE
Macro Monday trading video here. The market remains on a firmly defensive footing, with Utilities and Healthcare leading the new Chaikin EFT Power Gauge rankings of US sectors. There are some signs of widening breadth, favoring US large cap stocks, in our Macro Monday analysis but the technicals remain rather bearish.
In our Friday meeting ( pre market open) we discussed the importance of the weekly candle on the $SPX closing above the the low of last weeks candle, to make a bullish case and continue waiting for Santa Claus to make an appearance. The level to watch is SPX 2710 - 2715, roughly the low of last weeks candle. We also looked for bearish trades in weak sectors in the event we close lower. Lastly, we managed our new portfolio for the first time. We hope you'll spend a few minutes with us this weekend. Watch our video HERE
Today we initiated the "Rest Of World" and "Macro" portions of our paper money portfolio, as we put the new Chaikin ETF Power gauge to work alongside our own rules. Our plan is geared more towards investing than trading, with a timeframe of months to years. In todays video we take our daily tour of the markets ( pre-open), look at the current state of the bull / bear ratio on the SPY, which has retreaded and find ETFs that meet our rules inside the greater market environment to add to our new paper portfolio. Watch HERE
Relative Strength Wednesday
A common theme has developed from our various weekly analysis, Defense. This weeks Relative Strength Wednesday reenforces what we have been seeing as utilities and staples are the two sectors outperforming the market in all three time frames and maintain a bullish or very bullish Chaikin ETF PG rating. The route in oil has beat up the XLE, however, this morning Mike points out another commodity that had been going the opposite direction of crude. Join us for our complete Relative Strength Wednesday analysis HERE
Our weekly Macro analysis reenforces what we've been seeing elsewhere, which is continued defensiveness. Listen in to our Macro Monday meeting and make sure to join us for Relative Strength Wednesday this week. Listen HERE
We saw the Bull / Bear ratio improve this week as the market rallied. We also saw improvements to a few of our technical indicators. Including the direction of the 21 day MA, and prices relation to it, now above. However we remain cautious. Through our many years of tracking the Bull / Bear ratio, we have learned that the ratio often retests previous lows, much like price would. The market heads into the weekend overbought and near key fibonacci retracementlevels from recent lows. You can find our Friday video HERE