Systematic Trading Strategies and Next Level Trading Setups
Today’s report starts with an overview of short-term break (weak) and long-term breadth (still bullish). QQQ is leading with a new high, but small-caps breadth is holding up as IJR forms a bullish wedge. We then look at the housing failure, weakness in hard assets, a wedge in gold, a bullish setup in a defense ETF and two cloud stocks with bullish charts.
Not all pullbacks result in long-term trend changes and not all drawdowns lead to bear markets. The odds favor the bulls as long as the bull market signal is valid and drawdowns provide opportunities during bull markets. Today’s report will analyze the drawdowns in the Rotation Investor strategies. We will show the Maximum Drawdown, Median Drawdown and a drawdown range for putting money to work.
Beginning in the Midst of a Bull Run and Dealing with Drawdowns Read More »
Momentum-Rotation strategies get their edge from upward momentum. More often than not, this means there will be entry signals for stocks that seem overbought. Not all overbought stocks continue higher and some correct hard after becoming overbought. Can we improve performance by avoiding stocks that are extremely overbought? Today’s report will discuss the recency bias, show some overbought examples and puts an overbought filter to the test.
Today’s report covers a leading stock in the Medical Devices ETF (IHI), which is the strongest group with the Healthcare sector. We then analyze NVDA as it consolidates above the October breakout and shows the SMH chart. Attention then turns to the Cybersecurity group with three stocks forming short-term consolidations.
Today’s video starts with long-term breadth, yield spreads and the major index ETFs to define the broad market environment. We then focus on short-term weakness and the pullbacks in RSP, IWM and MDY. Some tech ETFs are very extended and a key group continues to lag. Housing ETFs are testing support, while gold and silver hold their breakouts. We finish with follow up for eight stocks.
Today’s report starts with the Advance-Decline Percent indicators to measure participation over the last two weeks. We then turn to the S&P 500 EW ETF to define the current pullback, as well as two housing-related ETFs. Some tech stocks are looking extended and we offer detailed analysis of the Cybersecurity ETF (CIBR). We close with bullish setups in an animal healthcare stock and a business software stock.
Today’s report will cover the broad market environment. We start with the long-term breadth indicators for the S&P 500 and Nasdaq 100 (%Above 200-day, %Above 150-day, High-Low Percent). Attention then turns to the BBB yield spread and long-term chart analysis for SPY and QQQ. QQQ found its mojo as the MAG7 ETF leads. Mid-caps are lagging, micro-caps are leading the small-caps are mixed.
SPX/NDX Breadth, Yield Spreads, SPY/QQQ Trends, MAG7 Leads and Small-caps Try to Lead Read More »
Chartists looking for stock setups can start with strong industry groups. The Fintech (FINX) is in a strong uptrend and leading, but looking extended short-term. While there is no setup currently, we can learn from past setups and apply these lessons to stocks within the group.
Fintech Leadership Provides Good Hunting Ground for Bullish Setups Read More »
Today’s report starts with a defense stock and a fintech stock forming tight wedges. After reviewing the rebounds in the Healthcare and Biotech ETFs, we then focus on two biopharma stocks: one testing a Bullish Setup Zone and the other with a leading breakout. And finally, we feature an under-the-radar tech stock trading near its breakout point from late October.
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Today’s report analyzes the move in the 10-yr Treasury Yield, the surge in ITB and five home builder stocks. Home Builders were lagging the last few months, but the declines look like normal corrections. The retracements were normal and some surged off bullish setup zones. In addition, we are seeing a momentum thrust in %B.
Plunge in 10yr Yield Triggers Home Builders – Analyzing ITB and Five Stocks (Premium) Read More »
The 10-yr Treasury Yield plunged as Treasury bonds surged on the heels of a new nomination for Treasury secretary. These moves lifted small-caps, banks and homebuilders. Banks have been leading for some time and small-caps started their move last week. Homebuilders held out for interest rates and got their catalyst on Monday. Today’s report will analyze
Drop in Yields Triggers Gap-Surge in Home Builders (Free) Read More »
Even though trading based on chart analysis involves some discretionary decisions, chartists can improve the odds of success by systematizing their process. This report will show four prerequisite filters based on a top-down approach. We will start with the broader market, look at the sector, and then apply two qualifying filters to the stock. First, I would make sure
Four Prerequisites to Improve Your Odds – A Live Example (Free) Read More »
Today’s report starts with some of the leading ETFs in strong uptrends – but without setups. These include software (IGV), fintech (FINX) and finance (XLF). Attention then turns to some oversold setups in Healthcare and Biotech, and the group’s leader (Medical Devices). MLPs are breaking out within the Energy sector and we are seeing two commodity ETFs strengthen (Uranium and Lithium). Turning to stocks, we have two breakout leaders (TJX, VRSK) and two former leaders with pullbacks (AVGO, UHS).
This report covers recent pullbacks in the major index ETFs (SPY, QQQ, MDY and IJR). Financials are a key driver for small-caps and I will show a leading uptrend in the Bank SPDR (KBE). We will then cover the breakout in the Robotics & AI ETF (BOTZ) and the pullback in the Cybersecurity ETF (CIBR).
It is important to understand the ebb and flow of the equity curve when trading a strategy. How long is the strategy flat or down? How often do we see strong momentum runs? How often does the strategy experience double-digit drawdowns? How can we take advantage of drawdown? We will answer these questions and more.
Understanding Equity Curve Performance and Setting Realistic Expectation (Premium) Read More »
The iShares Semiconductor ETF (SOXX) is lagging the VanEck Semiconductor ETF (SMH) as it broke the 200-day SMA and confirmed a bearish pattern. SMH is holding up because its top component remains strong. Nevertheless SMH is at a moment of truth ahead of a big earnings report from Nvidia.
A Tale of Two Semiconductor ETFs – Why is SOXX Weaker than SMH? (Free) Read More »
Stocks went on a tear the last eight days, but most of these moves were simply extensions of existing uptrends. Nevertheless, many stocks and ETFs became very overbought short-term. These include KBE, IGV, SKYY, FINX and CIBR. We also see the market pricing in policy shifts in Healthcare (XLV) and Defense (ITA), as well as the prospects of tariffs (CPER, DBB). Despite overbought conditions, it is a bull market we will highlight three stocks setting up: DDOG, CSX and CCEP.
Buying stocks that seem overbought is difficult, but this is often required when trading a momentum-rotation strategy. By design, these strategies buy the strongest stocks and many seem “overbought”. Momentum is all about buying high and selling higher. This report will test the original Rotation Investor strategies with the addition of an overbought filter. In other words, we will avoid stocks that are overbought. Does this filter help or hurt performance?
Do Overbought Filters Improve Performance for Momentum Rotation Strategies? (Premium) Read More »
The election has come and gone, and the market trends remain the same. The major index ETFs were in uptrends well before the election, breadth was strong throughout September-October and yield spreads showed confidence. This broad market trio was, and is, bullish. Tech-related ETFs extended on their breakouts and we will feature three AI stocks. Commodities were all over the place so we will revisit industrial metals and copper. Analysis includes VRTX, FCX, COPX and DBA.
