ETF Prophet

Expectations for the European Union Summit were low and the good news took buyers by surprise on quarter end. Oil rebounded strongly after dropping 20% in the 2nd quarter.  We broke out of our recent range to the upside aligning to the positive intermediate trend. Next week will be slow with 4th of July in [...]

One of the setups I posted on frequently is the VIXEN, which uses an overlay of the VIX and the focus stock or ETF to identify sweet spot trades.   This version uses TLT as an overlay on XLF to quickly see the super high odds trades.  The beauty of this setup is that is [...]

Sorry the blog has been slow lately. It will probably be so for another week. One study identified by the Quantifinder yesterday considered the strong breadth on days the SPX declined. I have produced the results table below.

The edge isn’t…

Markets started off weak from uninspiring jobless claims. The Supreme Court’s affirmation of Obamacare further pressured the market most of the day. European news continued to influence our trading. Late news of a growth pack and more Merkel rumors gave us a ferocious rally before quarter end. However, we still lost ground and the short [...]

One of the fun things I do is look at how my various exit and entry signals performed each day.  I’ve mentioned before that the PDQ is almost too good in predicting momentum reversals and that it tends to be psychic a day or 2 in advance of the actual turn.  Such was the case [...]

After a lukewarm start, bulls continued the rally with another day of low-volume buying and are on the verge of turning the short term trend back up. Traders have toned down their expectations from the European Summit after the recent sell offs. The Supreme Court ruling on Obamacare is expected tomorrow morning as well. On [...]

With 3 different PDQs focused on TLT the consensus signal is short term SHORT.  This signal is as of mid day and has led us to close our MRSI trade mentioned yesterday as part of the Situations package.  This decision is simply a discretionary risk assessment.  With end of month upon us and July 4th [...]

Yesterday’s low was strong support this morning. Angela Merkel’s rumored refusal on joint debt and Egan Jones’s cutting Germany to A+ failed to knock the market down. Early technology strength show month end buyers are eager to defend their portfolios. Perhaps we will probe the 132.5-133 SPY range again tomorrow, but if the bulls can’t make strong [...]

The launch of Mosaic has been delayed until July 4th to enable final refinement of a brand new module called Situations,  short term (6-10 day) trading opportunities within the Mosaic model.  The setup uses an indicator termed MRSI , which is a hybrid support/resistance forecasting tool blending the classic RSI and the Mosaic TrendX and [...]

Downside momentum reasserted itself today threatening the intermediate uptrend. We are very short term oversold and may get a bounce soon, but the short term trend is firmly down. We may see lower prices at the end of the week after the Europe summit. After today’s drop technicians are looking for a retest of the lows [...]

Equities put in a noisy, mixed week that left the S&P 500 (SPY) down -0.5%, but the NASDAQ 100 (QQQ) higher by +0.6%.   Meanwhile, Commodities (DBC) took it on the chin on slowing global growth forecasts. A negative VIX stretch offers the possibility of further healing after the Thursday slide, but short-term oscillators are otherwise [...]

The Russell rebalance gave a volume spike toward the end of day and a nice rally to ease the overstretched indicators from yesterday’s large sell off. Many are expecting this weak rally to fail, but we remain in a news driven market and quarter end mark up will kick in next week. The short term [...]

The SPY fell over 2% yesterday.  Below is a simple study that looks at SPY performance follow all 2%+ drops while the market is above the 200ma.

The stats table is impressive and suggests a solid upside edge.  But there is a problem wit…

An overbought market met some negative news flow with a ugly Philly Fed number, Spanish Bank troubles and Moody’s downgrade of world banks. There are just too many negatives for operation twist to support the market without another round of QE. With the Supreme Court decision on health care pushed to next week, profit taking kicked [...]

The Federal Reserve extended Operation Twist, but stopped short of QE3. Even though it is only a $267 billion program extension to the end of the year, the psychological boost helped the bulls erase a 10 point drop by close. It helps when the bulls know that Ben will be there through the end of [...]

The Mosaic models are going public next week in conjunction with the Mosaic Solutions Newsletter.  The current plan will bundle the Mosaic M and BQB models signals together with daily PDQ Dashboard updates of GE and TLT. The M model is more of a static portfolio with weekly rebalancing while the BQB model is composed [...]

Blue-lined markup comparison of the June versus April Federal Open Market Committee/ FOMC statements below: Labor Slowing/ Spending Improved/ Housing Depressed Inflation Contained Over Medium-Term Continued Accommodative Stance Low Rates Expected to Late 2014 Future “Twist” Operations Detailed Global Strains Elevated Single Hawkish Dissent Don’t forget the first reaction is often a fade, but price [...]

The recent performance of the Permanent Portfolio seems to have stoked some interest in the strategy crafted by Harry Browne. I’ve been noticing more references to the strategy making their way into my daily reading of favorite blogs. Looks like there is even a new book coming out about it, the authors of which have an informative blog I just discovered. I haven’t given the strategy much thought for quite some time so I read Harry’s book Fail-Safe Investing as a refresher. Only a small portion of the book deals with the composition of the Permanent Portfolio, but it is worth the read if you are not familiar with Harry’s 17 Simple Rules of Financial Safety. The Permanent Portfolio has three requirements: Safety, Stability, and Simplicity. The allocation is: 25% Stocks, 25% Bonds, 25% Gold, and 25% Cash. Positions are rebalanced on an annual basis when any one of the position’s allocation breaks the range of 15% to 35% of the portfolio. That’s it. The idea is to be able to profit in any of the four major market environments identified by Harry: Prosperity, Inflation, Tight Money or Recession, and Deflation. So how has this strategy performed? Quite Well: 1990-2012 [...]