Systematic Strategies and Next Level Technical Analysis

SPY Gets its Biggest Surge since November 2020. Is it Enough? (Free)

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The S&P 500 SPDR (SPY) surged 5.77% from Tuesday to Thursday and this is the biggest 3-day surge since the 6.07% advance on November 5th, 2020. This early November surge led to a breakout and the advance extended until January 2022. The current surge also shows some serious short-term strength, but there are some key differences between now and November 2020. Let’s investigate.

The chart below shows SPY above its 200-day as it consolidated in September-October 2020. The Trend Composite (bottom) window was also bullish. Thus, the long-term trend was up. The middle indicator window shows the 3-day Rate-of-Change for reference. The top indicator window shows 20-day average of the High-Low Range percent, which is the high-low range as a percentage of the average price. This measures volatility and the indicator was below 2% at the time of the November surge (normal volatility). Thus, SPY was in an uptrend and volatility was normal as the ETF broke out of a triangle.

Now let’s look at March 2022. First, SPY is below its 200-day SMA and the Trend Composite is negative. Thus, the long-term trend is still down. Second, the High-Low Range percent indicator has been above 2% for nine days (red) and this shows above average volatility (risk). This week’s surge is impressive short-term, but SPY is still in a downtrend and volatility is above average. I would like to see a meaningful breakout and follow through before considering it as more than a bear market bounce.

This week at TrendInvestorPro I continued the Trend Composite trading strategy series with part five. This part tested a trend-momentum strategy using the 50 ETFs in the All Weather List. Click here for immediate access to this series and more.

On this week’s video, I used the High-Low Range percent indicator to quantify volatility in the S&P 500 SPDR (SPY), DB Energy ETF (DBE) and Gold SPDR (GLD). The latter two are in uptrends and experienced short-term parabolic moves.

The Trend Composite and High-Low Range Percent are part of the TIP Indicator Edge Plugin for StockCharts ACP. This plugin includes nine other indicators that help traders define the trend, identify tradable pullbacks and set stops.

Trend Composite Strategy (Part 5) – All Weather List, Cross versus In-State Signals, Bear Market Alternatives

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Today’s article is the fifth installment of the Trend Composite strategy. The series was put on hold because of recent events and market volatility, but continues today and will complete before the end of the month. Today’s installment uses the highly curated All Weather ETF List, which covers most assets and has minimal overlap.

Trend Composite Strategy (Part 5) – All Weather List, Cross versus In-State Signals, Bear Market Alternatives Read More »

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It is important to remember that the major trends in play right now were in place before Russia invaded Ukraine. High-flying tech stocks were out of favor late last year and remain out of favor. Weakness spread as the Market Regime turned bearish in mid February and remains bearish.

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Trend Composite Strategy (Part 4) – Volatility-Adjusted Performance, Portfolios based on Trend and Price Performance, Bear Market ETFs

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Trend Composite Strategy (Part 3) – Portfolio Level Testing, StochClose Ranking, Market Regime Filter, Optimizing Number of Positions

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Mkt/ETF Commentary – Risk-Off ETFs and Uptrends, Market Laggards Get Biggest Bounces, Commodity-Related ETFs Continue to Lead (Premium)

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Mkt/ETF Commentary – Volatility Remains, QQQ Bounces after Break, Energy and Defensive ETFs Lead, Metals and Ag Hold Up (Premium)

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Mkt/ETF Commentary – Volatility Remains, QQQ Bounces after Break, Energy and Defensive ETFs Lead, Metals and Ag Hold Up (Premium) Read More »

Trend Composite – Understanding the Indicators, Aggregating Signals, Reducing Whipsaws, Catching Trends

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