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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 favor of going long stocks or as a system to go long SPY vs. a move to cash/bonds (SHY/AGG).
We also offer paint by numbers systems for bonds and gold. A diversified portfolio is offered below our commentary. As always, consult your own advisor and due your own due diligence. Feel free to send questions using the feedback button.
The Call For The Week of July 6:
A strong jobs report helped to push stocks into the green for the week while bonds and gold were flat. Our big picture system remains 60% bullish (3 for 5) which suggests more patience is needed before fully committing to equities. Remain focused on preservation.
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. 0% long TLT (20% SHY -- AlphaBond)
Chart #4. 20% long GLD & GDX (0% in SHY or cash --AlphaGold).
Chart #5. 0% long SPY (30% SHY or cash -- New Dow Theory (FWB))
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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