AlphaDow Barometer: MARKETS POWER PAST 50 DAY MOVING AVERAGE -- WHAT TO DO?

Sean Gallagher Has Had Over 25 Followers Rank: 49 Followers: 45 Votes: 23 Years Member: 6 Last Update: 24 October 2014, 7:23 Categories: ETFs
General Market Commentary
Canadian Stocks

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Long: 25% TLT, 25% SHY, 50% cash. We scaled out of two positions Wed and Thurs. Now we sit tight in cash and bonds to see if the market can forge an intermediate term bottom.

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The Call For The Week of Oct 20th:

Redemption for the bulls at the end of another down week for stocks. Bonds reversed at new highs in a classic blow off type move that may signal an intermediate term top in bonds. Know your risk tolerance and focus on preservation. Do not swing at every pitch -- Charles Dow said he would take one out of every four opportunities he came across.

A Dow Theory bullish signal has been re-confirmed several times since the original BUY 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.

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):

$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 on 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 - Scale out of half position TUES 21st

5. SPY -- Scale out of half position Tues 21st

Stop loss at 100d MA on weekly close

6. 25% Postition TLT Stop loss at $113.38

7. 25% Position: SHY - Cash proxy

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