AlphaDow: Binary Wave Systems For Stocks, Bonds, & Gold

Sean Gallagher Has Had Over 25 Followers Rank: 26 Followers: 48 Votes: 23 Years Member: 8 Last Update: 1 December 2016, 9:43 Categories: ETFs
General Market Commentary
Canadian Stocks

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AlphaDow is a 100% mechanical Inter-Market Strategy consisting of FIVE systems: 3 trend following, 1 breadth and 1 based on interest rates. Consider it a board of governors approach with each getting 1 vote.

Add up the numbers in the dots in each indicator pane. A BULLISH state first occurs when the count reaches 5 out of 5. Can be used as a 'regime filter' to signal when the odds are in your favour of going long your favourite stocks like AAPL, AMZN, BABA etc. or as a BULL/BEAR system to go long SPY or move to cash/bonds (AGG).

The Call For The Week of Nov 28th:

Stocks swept to record highs in the U.S. helped by gains in staples and technology stocks. Gold tumbled to a 9-1/2 month low on expectations of a U.S. rate hike. Oil was dragged down by uncertainty over whether OPEC will cut production. Continue to remain invested in stocks.

Our mechanical systems:

Turned BULLISH on the U.S. stock market on 3rd March '16 (5 out of 5).

Turned BULLISH on the Canadian stock market (5 out of 5) as of the 18th May '16 (5th June '15 was BEAR signal).

Turned NEUTRAL on Gold as of 19th Sept '16.

Turned NEUTRAL on Bonds (TLT) as of June 13th.

Turned NEUTRAL on SPY on ValueMentum Nov 14th

Less

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):

1. $SPX is trending up (trend is up)
2. Advance/Decline Line is trending up (buying power)
3. $TRAN is trending up (Dow Theory confirmation)
4. Utility Average MA rises (interest rate sensitive Utilities lead)
5. Bonds are trending up (interest rates are low)

74% winning trades (13/18) since 1970. Beats buy and hold 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 current ETF Advisor Portfolio

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

1. $TSX is trending up (trend is up)
2. Advance/Decline Line is trending up (buying power)
3. $TRAN is trending up (Dow Theory confirmation)
4. Utility Average MA rises (interest sensitive)
5. Bonds are trending up (interest rates are low)

67% winning trades since 1980 - beats buy and hold with lower volatility. Buy and Hold the strongest ETFs or stocks when in BULLISH state. Otherwise hold cash or bond proxy.

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 - Intermarket System 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. AlphaBond - Intermarket System 3=BULL, 1=BEAR (TLT)

Bullish on TLT when 3 systems are on BUY. BEARISH when count drops to 1 :

1. Fidelity Financial RS is positive = +1
2. Utility RS is positive = +1
3. Chemical RS is negative = +1
4. Nickel ROC is negative = +1

Financial assets and utilities lead. Inflation is bad for bonds. Source: Formula Research Intermarket Bond Strategy.

5. ValueMentum -- 3 Point System developed by Nelson Freeburg

Bullish on SPY when all 3 systems are TRUE. Sell and go to SHY or cash when all 3 are FALSE.

Logic: when the Nasdaq is outperforming the S&P500 and Growth is outperforming Value, the US Stock market outperforms.

11.7% drawdown and 9.1% CAGR since inception vs. 47% drawdown for S&P500.

Of 17 long entries, 14 were profitable, an 82% batting average. Source: Formula Research December 30, 2003.

6. Dual Momentum 1yr SPY

7. VanMoMo -- Dual Momentum using Vanguard ETFs

Bullish on VUN.TO when:

1) 1yr ROC of SPY> 1yr ROC of T-Bills (BIL) and 1 yr ROC of SPY > 1 yr ROC of VEU.

OR.........Bullish on VDU.TO when:

2) 1yr ROC of SPY> 1yr ROC of T-Bills (BIL) and 1yr ROC of VEU > 1 yr ROC of SPY.

ELSE:

3) buy and hold VBU.TO (bonds).

In english: if the red line is positive and above the blue line it's bullish for VUN.TO. Otherwise, if the Blue line is above the Red line and is positive it's bullish for VDU.TO Else bullish for VBU.TO

Send feedback for details or search for Dual Momentum.

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