Sometimes what seems logical and helpful, is not and needs to be reconsidered. This is my conclusion with the sector breadth models. They are logical, and perhaps helpful at times, but they do not add value when it comes to timing trends in the sector SPDRs. A simple StochClose strategy performed better overall. This article will quantify signals for three breadth models using the sector SPDRs.

The turn of the month shows a strong bullish bias with an extremely stable equity curve that really took off the last few years. This strategy, which is only invested 38% of the time, outperformed buy and hold with a higher Compound Annual Return. Overall, the eight day percentage change at the turn of the month is positive 68% of the time for SPY. Despite strong numbers overall, February is weakest month when testing over the last twenty years, and we just happen to be in February.

This content is for subscribers. (Login or Subscribe) Username Password Remember Me     Forgot Password

This article will explore and backtest different moving average combinations on the S&P 500 SPDR over the last twenty years. Most moving average strategies work great when SPY trends, regardless of the period settings. However, SPY (aka, the market) does not always trend and trends are not uniform. Some are short and fast, while others are long and steady. This means we need moving averages that can best adapt to different environments.

RSI is widely used as a momentum oscillator to identify overbought and oversold levels. A dive into the formula, however, reveals that RSI is quite well equipped for trend-following strategies. It can even be used to rank ETFs and stocks to find those with the strongest momentum.

Seasonality is behind price action when it comes to analysis and signals, but monthly seasonal patterns can provide a tailwind to existing trends. This study will look at monthly seasonal patterns for the S&P 500 over the last 30 years with a new twist. In addition to win rate, we will also look at returns and the equity curves.

For the third time in 20 years the stock market fell by more than 30%. As noted in the study of bear markets, the S&P 500 fell around 50% in 2002-2003 and 2008-2009. Folks are calling this a generational opportunity, but this is the third such opportunity in the last 30 years, which covers a generation.