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General Market Commentary
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 April 6th:
The virus data coming out of some the world%27s hot spots is improving. Stocks are set to rally at the open while bonds are down. The next hurdle is the relief rally high at 2,640 on the S&P 500. Conservative investors should remain cautious but prepared to buy. Aggressive traders can set stops at recent lows.
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). 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.
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