AlphaDow: 'Trend Following Systems for SPY, XIU, GLD and TLT'

Sean Gallagher Has Had Over 50 Followers Rank: 24 Followers: 52 Votes: 25 Years Member: 8 Last Update: 26 September 2016, 9:19 Categories: ETFs
General Market Commentary
Canadian Stocks

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AlphaDow is a 100% mechanical Inter-market Strategy consisting of three trend following indicators, one breadth and one based on interest rates. 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 favor of going long your favorite stocks like AAPL, AMZN, BABA etc.

The Call For The Week of Sept 26th:

Stocks extended their gains last week on a Fed-induced rally. Janet Yellen and her band of merry monetary policy makers decided to leave the punch bowl out until year end, boosting both stocks and bonds in the process. Gold jumped and oil was lifted on supply data. Our indicators have been steadfast in their bullish stance for months.

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 11th July '16.

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

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.

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