The Traders Journal

New ChartPack (Q2 - 2017) Providing Timely Tradeable Insights to Help You Invest Smarter

Remember the bygone advertisements from years past about hair replacement?  The gentleman stares into the camera and says “I’m not just the president of the Men’s Hair Club, but I am also a client.”  Our ChartPack deserves a similar endorsement.  “I’m not just the creator of the Tensile Trading ChartPack, but I am also a daily user.


When I think back 25 years to how I traded and the tools I used, I’m stunned.  These days, the ChartPack does all the heavy lifting and truly simplifies the market for myself and all its users.  Not only am I infinitely more efficient than I was years ago, but the ChartPack helps me generate high probability investments on a recurring basis. It can do the same for you!

I do hope you’ll put it to work as you mine the markets for the best opportunities it has to offer.  Please don’t overlook the fact that you’ll also find it to be a powerful ally  in the monitoring and managing of your positions — be they stocks, ETFs or mutual funds. 

                                                                        This Quarter’s Updates

This quarter’s updates mark a significant new emphasis and contribution to the ChartPack tool.  In the past, it was presented as a powerful organizational paradigm of ChartLists pre-populated by tickers that were carefully selected as most appropriate for each grouping.  

This quarter, you’ll notice that we’ve added many insightful “NOTES” to over 50 of the ChartLists.  Some ChartLists are new, and the notes explain and describe their features.  Other notes, for example, describe the actual percentages of key equities that make up each of the ten SPDR Sector ETFs.  More on this later.  The point is that ChartPack users should pay attention to the helpful comments found in the NOTES section.

200 / 205 / 206 -Global & International
I’m very pleased to announce that we solicited a global markets aficionado to dig into these three ChartLists. The result is nothing short of sensational. Generally, the ticker symbols have been expanded and renamed to sort in alphabetical order.  The charts now show many of the ‘verbose’ descriptions which produce a fully-expanded explanation of a ticker symbol.  Users should understand that indexes have a ‘$’ prefix.  For example, $HSI means the Hong Kong Hang Seng Index which is not a tradeable ticker.  On the other hand, EWH is the Hong Kong ETF ticker and is tradeable.  

GR-206 is a new ChartList populated with multi-country regional ETFs.  For example, if you don’t want to simply invest in Mexico (EWW) or Brazil (EWZ) but prefer a diversified fund that contains both, this new ChartList will facilitate that investment by offering the iShares Latin America 40 ETF (ILF).  As our colleague, John Murphy, has explained, using a currency-hedged ETF protects against a strengthening of the US dollar versus the currency in which the ETF’s holdings are priced (or a weakening of it relative to the dollar).  If, as now, the dollar is in a downtrend vis-a-vis the foreign currency, a  currency-hedged ETF may not be advisable.

The other features I’d like to point out are the extensive comments which can be seen in the ‘Summary’,  ’10-per-page’ and ‘Edit’ views of the ChartLists.  These major enhancements are an acknowledgement of the growing importance and profitability of international markets and especially the emerging markets.  The new and improved ChartLists will help you profit from these trends.

401 - 411  -  SPDR Sector ETFs
As you know the market is divided into ten sector funds.  We strongly believe that profitable market analysis needs to start here.  Having said that, we also believe that investors must understand the nature and composition of these crucial ETFs.  StockCharts.com uses the Select Sector SPDRs because they are the most widely traded ETFs.  We’ve written before that simply trading amongst these sector funds using momentum or money flow strategies can be a very profitable investment strategy for a portion of your portfolio.  However, it would not be prudent to implement such a strategy without an intimate knowledge of the key equities that comprise the sector ETF of choice.

For example, if you owned the Energy Sector Fund (XLE) or alternatively were considering acquiring a position, it would be a colossal oversight not to analyze and monitor Exxon Mobil (XOM) and Chevron (CVX) separately since these two equities account for over 38% of XLE.  Similarly, the Technology Sector Fund (XLK) is comprised of Apple (AAPL) and Microsoft (MSFT) which alone account for over 25% of this sector fund.

Recognizing these facts, the new ChartPack update now shows the actual percentages that each of the top five equities account for in their respective sector funds.  The rule here being that if you are interested in the sector funds (and you should be whether or not you are actually trading them), you need to be monitoring the top 5 largest positions that make up that sector.  The ChartPack does this for you.

One last comment with respect to individual holdings and how often they change.  This quarter, we added four new companies to the Real Estate Sector Fund (XLRE), so please do not assume the collection of tickers is static.  You need to stay on top of these changes!

Fidelity Select Sector Funds  -  Timely Tradable Insights
The July 10, 2017 edition of the Wall Street Journal had a full page advertisement from Fidelity Investments with this heading:  “You could research 1,000 different stocks, find 100 you like, narrow it to 10 and invest in just one.”  Here’s how Grayson and I propose you achieve the same objective.

Review the 41 Fidelity Select Sector Funds in ChartList #420.  Narrow it down to the top three Sector Funds in the present market.  Then find the individual stocks that Fidelity is presently buying to produce this superior performance. Voila!  The ChartPack makes it quick, timely and easy to focus on the best high-probability stocks presently under accumulation by Fidelity.

Now, let’s highlight a few of the important observations that stood out from this quarter’s Fidelity updates:

  • Only four of the Fidelity Select Portfolio Funds’ top 10 holdings lists were unchanged this quarter. A low number like that sends a signal to the rest of us: this market is NOT about sitting on the sidelines!
  • Last quarter, we pointed out some big shakeups in the Automotive portfolio. To us, it looked like the management team was trying to position the fund properly ahead of major shifts in industry technologies that continue to gain momentum. This quarter, the Automotive portfolio came under new management in April and was even more active. In Q2, five (5!!!) new positions were added to the fund’s top 10 holdings. With fresh positions in two big auto parts retailers and two used car retailers, the new management team seems to have some interesting opinions on where car buying trends and headed.
  • In the Communications Equipment portfolio, semiconductor and telecomm equipment giant, QUALCOMM (QCOM), got the boot. This is a stock that’s seen quite a bit of news coverage in the past few months due to its highly-publicized royalty payments dispute with Apple. In its latest earnings report earlier this week, profits for QCOM slid dramatically. The big money clearly lost interest this past quarter, and the charts reflect it.
  • As the growth of Netflix and other video streaming platforms continues to accelerate, traditional entertainment and media companies have struggled to fight back. In the Consumer Discretionary fund, Time Warner fell out of the top 10 list and was replaced by a major hotel chain. When considered in light of the broader shifts that the entertainment industry is seeing, this move is by no means an insignificant one!
  • At a time when health care is all anyone is talking about, it’s no surprise that the Fidelity Health Care Portfolio had an active quarter. The fund added 3 new positions to its top 10 holdings list, including two hot health care providers (both with some pretty attractive charts!).  The health care industry has been a leading sector lately, so these changes could yield some very actionable insights.
  • The Leisure Portfolio is always an interesting one to analyze, because the fund’s holdings span quite a few diverse industry groups. This past quarter, the fund took big positions in a major cruise line (RYL: Royal Caribbean) and a big hotel chain (HLT: Hilton), while also shifting away from fast food restaurant Jack In The Box (JACK). Moves like these are always intriguing from a macro level, and can also make for profitable trading opportunities!
  • Two of the energy-related portfolios, Natural Gas and Natural Resources, both saw substantial changes to their respective top 10 holdings lists. This is a theme that has persisted throughout the past few quarters as the energy sector continues to be a difficult one to trade. Sometimes, when the big money moves around this much, it can be a clear sign to the rest of us: stay away from this sector because it’s just too hard to get right!
  • Finally, while the Technology Portfolio didn’t see too many changes to its top 10 holdings list, it did see a MASSIVE drop in the fund’s total holdings number. The fund reduced its total positions by 40%, down from 235 to 142. In its top 10, the fund added Alibaba (BABA), which has been on fire this year. That stock may just be worth adding to your watchlist if it’s not there already.

UPGRADE INSTRUCTIONS FOR EXISTING CHARTPACK USERS:
Important:  If you have modified any of the charts in any of the ChartLists that start with “GR - ”, those changes  will be deleted as part of the upgrade process.  If you want to keep those changes, you need to copy those charts into a different non-"GR" ChartList before you upgrade!

To Upgrade the Tensile Trading ChartPack, follow these steps:

  1. Log in to your account and then click on the "Your Account" link in the upper right corner of the web page.
  2. Scroll down and find the "ChartPacks" area towards the bottom of that page.
  3. Find the entry for the "Tensile Trading" ChartPack in the table that appears.  (If you don't see it, that means that you didn't purchase it - click here to purchase it.)
  4. Click on the "Re-Install" button next to the Tensile Trading ChartPack to start the reinstall process.

The download should take about 15 seconds.  At that point, you can explore the new ChartLists and updates.

INSTALLATION INSTRUCTIONS FOR NEW CHARTPACK USERS:
If you are new and would like to add the Tensile Trading ChartPack to your StockCharts account, please Click HERE to get started.

Trade well; trade with discipline!
- Gatis Roze, MBA, CMT
- Grayson Roze

StockMarketMastery.com

 

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