Relative Strength Analysis

We stack rank ETF performance across various lookback periods and trend them to get an idea of how money is flowing across the globe.  We use RSMK as the underlying indicator to compare relative performance of ETF's, but what you see are the comparative rankings over a ten, twenty, thirty...up to a 160 trading day lookback period.  Our sweet spot for relative strength performance is a 60 to 120 day lookback period.  If the ETF is ranked in the top 1/3 of all ETF's compared in the group consistently across a 3 to 6 month period AND maintains or begins to recover relative strength in the near term (10 - 20 days after pulling back), that's the ideal set up for trend continuation, especially if stocks are generally uptrending.  If a shorter time-frame moving average is above the longer time-frame moving average in multiple time-frames,  the RSI is above 50, but especially above 60 (and not yet to 70), and money flow is above .1, all of the preconditions are met for making it onto our trading watch list.  We then wait for Chaikin checklist conditions to play out to time our trades.

We look at relative strength in a number of ETF battle groups that represent important investing themes.  This analysis gives us a better sense of what's happening in the global capital markets than reading the Wall Street Journal in its entirety every day of the week. 

Global Relative Strength Comparison:  it's ROW (Rest of world) time

commodities outperforming stocks 

US SECTORS - real estate boom and stocks tied to oil and gas keep rockin.  Is tech beginning to recover?

US INDUSTRY GROUP STRENGTH - Energy Services, Aerospace, and a bunch of tech and telcom industries

International - Latin America shows persistent strength, India and southeast Asia on the mend.  SPY (not shown) Falls to Row 32