AlphaDow Barometer: If you can count to 5 you can beat 90% of the fund managers out there

Sean Gallagher Has Had Over 25 Followers Rank: 30 Followers: 46 Votes: 29 Years Member: 6 Last Update: 20 December 2014, 9:42 Categories: ETFs
General Market Commentary
Canadian Stocks

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Fees, taxes and emotions are the killers of investment performance. Use low cost ETFs like SPY and QQQ and follow this simple system. Chart 1 shows our 5 Point strategy for timing the stock market. We are on a BULL signal (5 for 5) for US Equities and will remain as such until 3 indicators turn BEARISH. Click FOLLOW (at right) to be informed of when our proven strategy tells you to SELL this market.

The Call For The Week of Dec 2nd:

It's a crude, crude world as stocks had their worst week since 2011. The price of crude oil dipped below $60 shifting focus to slowing demand and reduced capital expenditures. The bond market rallied and gold firmed while money flowed out of higher risk securities. We continue to look for dips to add US exposure.

Long: 25% QQQ 25% SPY, 25% TLT, 25% SHY

A Dow Theory bullish signal has been re-confirmed several times since the original BULLISH signal at 13,649.70 on 12/31/13. The Dow Theory is a form of technical analysis that relies on detecting trends in the stock market to determine an investment strategy. The detection of these trends may be interpreted differently by different analysts and the opinions expressed on this website may not be shared by other individuals who apply the same principles of The Dow Theory. Past performance is not an indication of future returns. It should not be assumed that any recommendations made will be profitable or without the risk of loss or will equal the performance of the benchmark portfolio. All investments involve the potential loss of capital.

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1. AlphaDow -- Five points possible. 5=BUY 2=SELL. Use SPY or the strongest (Alpha) ETFs.

Bullish when 5 out of 5 are true (+1):

$SPX is trending up (trend is up)

Advance/Decline Line is trending up (buying power)

$TRAN is trending up (Dow Theory confirmation)

Utility Average MA rises (interest rate sensitive)

Bonds are trending up (interest rates are low)


74% winning trades (13/18) since 1970. Beats buy and hold by 300% with less volatility. Past performance is no guarantee of future results. This is not investment advice, but is for educational purposes only. Consult your investment advisor for additional information regarding suitability, fees, expenses and short term trading costs.

2. AlphaDow TSX -- 'Canadian Dow Theory' -- send feedback for strongest (Alpha) ETFs plus sto

Bullish when 5 out of 5 are true (+1). Stay invested until 3 turn false (+0).

$TSX is trending up (trend is up)

Advance/Decline Line is trending up (buying power)

$TRAN is trending up (Dow Theory confirmation)

Utility Average MA rises (interest sensitive)

Bonds are trending up (interest rates are low)

67% winning trades since 2000 (2/3) beats buy and hold by 87%.


Past performance is no guarantee of future results. This is not investment advice, but is for educational purposes only. Consult your investment advisor for additional information regarding suitability, fees, expenses and short term trading costs.

3. AlphaGold - 3 Point System for Gold 3=BUY, 1=SELL (GLD or GDX)

Bullish when all three systems are on a BUY. Score +1 for each of the following TRUE statements:

1. US Dollar Index < 12 wk EMA
2. Oil > 12 wk EMA
3. Dow > 48wk EMA

Buy Gold (GLD) if score is +3 (all three TRUE). Stay invested (long GLD or GDX) until 2 systems turn false (0).

14.8% CAGR with 13.8% max drawdown 1954-1995. *Source: Wall Street Journal - Divining Gold's Next Move 2006

Past performance is no guarantee of future results. This is not investment advice, but is for educational purposes only. Consult your investment advisor for additional information regarding suitability, fees, expenses and short term trading costs.

4. QQQ - 25% Position. Stop @ $102.55

Stop loss at 100d MA on weekly close

5. SPY -- 25% Position

Stop loss at 100d MA on weekly close

6. 25% Postition TLT Stop loss at $115.38

7. 25% Position: SHY - Cash proxy

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