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Categories:Canadian Stocks
General Market Commentary
Market Timing
In Chart #1 (AlphaDow), add up the numbers in the boxes. A BULLISH state first occurs when the count reaches 5 out of 5. A BEARISH state occurs when any 3 of the 5 turn negative. You can use this as a %27regime filter%27 to signal when the odds are in your favour of going long stocks or as a system to go long SPY vs. a move to cash/bonds (SHY/AGG).
The essence of portfolio management is the management of RISKS not the management of RETURNS. All good portfolio management begins and ends with this premise. -- Benjamin Graham
The Call For The Week of March 30th:
A relief rally in stocks is under way, spurred by a massive multi trillion dollar stimulus package. Stocks have rallied back to resistance levels so conservative investors should still remain cautious. Only clients with higher risk tolerances should attempt to find a bottom here. Scale in if you%27re still in cash.
Summary: Our "Sleep Well At Night" (SWAN) Portfolio uses a carefully measured suite of systems for stocks, bonds and gold.
Chart #1. 0% long SPY (30% SHY or cash) [or if you are Canadian use Chart #2. 0% HXT.TO].
Chart #3. 20% long TLT (vs. SHY -- AlphaBond)
Chart #4. 0% long GLD (AlphaGold) 20% in SHY or cash.
Chart #5. 0% long SPY (Fabian Wealth Builder) 30% SHY or cash
Each position is managed by a unique system, namely 1. and 2. AlphaDow, 3. AlphaBond, 4. AlphaGold, 5. FWB - New Dow Theory respectively.
Bullish when 5 out of 5 are true (+1) for each condition:
1. $SPX is above 65wk MA
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)
Average holding period 392.3 days. 0.58 round trip trades per year. Longest drawdown duration 50 months vs. 73 for buy & hold.
64% winning trades since 1980. Beats buy and hold with less volatility (0.53 MAR Ratio).
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.
Bullish when 5 out of 5 are true (+1). Stay long HXT.to or XIU.to until 3 turn false (+0).
1. $TSX is trending 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.
Bullish on BOND, JNK or TLT when 3 systems are on BUY. FLAT (go to cash) when count drops to 1 :
1. If Fidelity Financial RS is positive add +1 to model count
2. If Utility RS is positive add +1 to model count
3. If Chemical RS is negative add +1 to model count
4. If Nickel ROC is negative add +1 to model count
Financial assets and utilities lead. Inflation is bad for bonds. Source: Formula Research Intermarket Bond Strategy. Send feedback for complete details.
Bullish on GLD or CGL.TO 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.
Bullish when 3 out of 3 are true (+1) for each condition:
1. $SPX is above 39wk MA
2. $TRAN is above 39wk MA
3. Utility Average is above 39wk MA
Sell when 2 of 3 are FALSE (below 39wk MA).
Since 1980:
Average 0.84 trades per year. Longest drawdown duration 61.4 months vs. 73 for buy and hold.
84% winning trades
11.3% cagr 17.4% max dd
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.
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