This meeting happened just before Friday trading. (Video Here) We looked at the broad markets (and are becoming increasing neutral -- in fact, cautious about a possible market trend change). We performed a complete sector relative strength analysis using Chaikin Analytics data and looked for some short term trades. We find the combination of Power Gauges (and Powerbars in ETF's) combined with technical and relative strength data to be invaluable to forming our market opinion and directional bias. When market conditions are choppy like they are now, this is where the Chaikin platform really comes in handy.
How to read our Relative Strength Chart. Powerbars tell you whether the sector bull-bear ratio is over or under performing the SPY. For multi-month trades, we won't consider a position unless this mostly-fundamental reading is in line with the direction we'd trade in. That's assuming the relative strength trend is in our favor as well. The 1, 3 and 6 month relative strength trends vs. the SPY must also line up based on the time frame we're trading. For short term bullish option trades, we like to see "OVER" in the Powerbar score (sector showing stronger fundamentals than the market overall) and "OVER" in the one and three month time frames (sector outperforming the market in both time horizons) We cover this in depth in today's video.
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