Recent Commentary and Analysis
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Chart Strategy – Timeframes, Trend Composite, Momentum Composite, StochRSI, Setups and Signals (Premium)
A charting strategy is essential because it increases objectivity and improves the odds of success. A basic chart strategy is similar to basic black jack strategy. In his classic book, Beat the Dealer, Edward Thorp, lays out a basic black jack strategy with a set of rules to improve the odds. Once players master basic strategy, they can move on to card counting and such to further improve performance.
Mkt/ETF Commentary – CBM Flips, Commodity Related ETFs Lead, Finance and Staples Related ETFs Hold Up, Tech Turns Volatile (Premium)
The stock market is as divided as ever with the pockets of weakness at the risk-on end. Risk-off ETFs and commodity-related ETFs are performing the best right now. Finance-related ETFs are also holding their own as the 10-yr Treasury Yield exceeds 2%. There are some
Trend Composite Strategy (Part 3) – Portfolio Level Testing, StochClose Ranking, Market Regime Filter, Optimizing Number of Positions
Today’s article is the third installment of the Trend Composite series, which is working towards a trend-momentum strategy for trading ETFs. Today we will move from “All Signals” testing to portfolio level testing. We will first use uptrend/downtrend signals
Weekend Video – Big Pockets of Weakness, Yield Spreads Remain Elevated, Commodity ETFs are Leading (Premium)
The Composite Breadth Model is net bullish because the 5-day SMA for the S&P 500 is above the 200-day SMA. Even so, some 55% of S&P 500 stocks are below their 200-day SMAs and fewer than 40% of mid-caps and small-caps are above their 200-day SMAs. There are more long-term downtrends than
Metals & Mining SPDR Goes for Relative and Absolute Breakouts (Free)
It’s been a rough year for much of the market, but the Metals & Mining SPDR (XME) is bucking the selling pressure as it challenges its 2021 highs and the price relative breaks out. There is also a big
Mkt/ETF Commentary – Risk-Off ETFs and Uptrends, Market Laggards Get Biggest Bounces, Commodity-Related ETFs Continue to Lead (Premium)
February is the month of the big bounce. As is normal after a big decline, names that led the way lower and fell the most are getting the biggest bounces. Most of the ETFs with the biggest bounces were in downtrends already and these are still considered oversold bounces within downtrends.
The Indicators, Settings and Inputs for the Composite Breadth Model – Plus Quantifying and Comparing Performance (Premium)
The broad market timing model took another evolutionary step. The goal is to develop a logical and robust model that captured major moves in the stock market, and will continue to capture these moves. We are not talking pullbacks, corrections or dead cat bounces. Instead, we are talking bull and bear markets that affect the vast majority of stocks. The BIG trend or the market regime, as it also called.
Trend Composite Strategy (Part 2) – All Signals Testing for Five Trend-following Indicators and the Trend Composite – 97 ETFs from 2007
Today we put the individual trend-following indicators in the Trend Composite to the test and compare performance against the Trend Composite itself. These are “All Signals” tests that give us an idea of trade frequency (number of trades), Win Rate, Average Gain and Average Loss. We will also look at three other performance
Weekend Video – CBM Flips Bullish, Small and Mid Cap Breadth Lags, Commodity Related ETFs Lead, Banks and Insurance Bounce (Premium)
Strength within the S&P 500 flipped the Composite Breadth Model bullish this week, but the %Above 200-day SMA and High-Low Percent indicators show more pockets of weakness than strength in the broader market (S&P 1500). The Trend Composite is bearish for all
Using the ETF Trend Signals and Ranking Table
The ETF Ranking, Signals and Setups Table makes it easy to separate the leaders from the laggards, track trend signals and find mean-reversion candidates. This article will explain the key features of this customizable table and show how to get the most out of it. We will finish with a chart example showing the origins for signals and numbers on the table.
Reduce Whipsaws and Improve Performance with a Simple Filter (Free)
The 200-day SMA is quite the battle zone when it comes to the S&P 500. In fact, the index has crossed this key moving average 165 times since 2000. That’s a lot of crosses, and a lot of needless whipsaws. Chartists can reduce whipsaws and improve performance by applying
Mkt/ETF Commentary – Volatility Remains, QQQ Bounces after Break, Energy and Defensive ETFs Lead, Metals and Ag Hold Up (Premium)
Small-caps were the talk of the town in mid November as they broke out of a seven month range and the skies opened up. Volatility then reared its ugly head in late November when the Russell 2000 ETF (IWM) fell some 12 percent from a new high. IWM continued lower in January and hit a 52-week low. The Russell 2000 Growth ETF (IWO) led the way as money fled high-beta stocks and ETFs.
Trend Composite Strategy (Part 1) – Understanding the Individual Indicators, Aggregating Signals, Reducing Whipsaws, Catching Trends
This is the first article in a new strategy series that will extend over the next several weeks. We will start by defining the Trend Composite indicator and then work our way towards a systematic trading strategy. The strategy is based on signals from the Trend Composite.
Weekend Video – More Downtrends than Uptrends, Oversold with Excessive Bearish Sentiment, Commodity ETFs Lead (Premium)
January was a rough month for stocks so far as QQQ fell 11.6% and IWM fell 12.2%. SPY and the S&P 500 EW ETF (RSP) held up much better with declines of around 6%. Again, we are seeing more weakness in mid-caps, small-caps
Mkt/ETF Commentary – CBM Turns Bearish as Market becomes Oversold, Commodity ETFs Hold Up, Downtrend Signals Expand (Premium)
There were lots of downtrend signals this past week and over the past month. Selling pressure expanded and broadening participation on the downside was enough to push the Composite Breadth Model back into bear market mode. Note that I will update the Market Regime page on Friday morning. For now, the pickings are slim among the equity-related ETFs