ETF Prophet

Equities tried and failed to hold support last week, but neither has a capitulative event occurred. It still ‘feels’ like price is on the edge — at once oversold, yet not broadly so and more negative news flow could easily hurtle us towards those as yet rising 200-day moving averages. For the week, the S&P [...]

Talk about a reversal of fortune — last week we identified early overbought conditions, only to finish the first week of May broadly oversold on strong downward reversion momentum. In fact, the S&P 500 (SPY) was lower for the week by -2.4%, leaving price just a dollar or so above monthly support. In that last [...]

Blue-lined markup comparison of the April versus March Federal Open Market Committee/ FOMC statements below: Labor & Spending Improving/ Housing Depressed Inflation Increased Continued Accommodative Stance Low Rates Expected to Late 2014 No Specific Mention of “QE3″ Global Strains Remain Single Hawkish Dissent Don’t forget the first reaction is often a fade, but price can [...]

Two weeks ago my first “Sensitive Issues Scoring” model based on relative positioning of and among nine economically sensitive ETFs issued a first warning for equities. Last week, a fuller, more robust version driven by fifteen intermarket sector, style and country ETFs weighted for importance joined the party with its own warning signal as trading [...]

Two of my long-term risk models are now signaling market transition warnings for the weeks ahead — more on this in a follow-on post tomorrow (link). Meanwhile, for a week that sure “felt” volatile, looking back I still find it surprising that nearly all sectors, with the notable exception of the Apple (AAPL) driven Technology [...]

Last fall I spoke at an active money management conference, where I introduced about a half-a-dozen or more weekly inter-market ETF models designed to measure “risk acceptance” in equities. The subject of this post features one of the more basic models, which was partially inspired by the highly recommended “The Lawyer Trader” blog.

For the last several weeks we had been hypothesizing a pullback, and here it is. For the week, the S&P 500 (SPY) fell back another -1.9%. However, the VIX is increasingly stretched from its mean, which may better support a bounce in the week ahead even though price is not yet fully oversold. [Week 16 [...]

Below is a quick look at how the SPX has performed in the past on Holy Thursday. Like the last day before many long weekends, it has shown a bullish propensity over the years.

The numbers are compelling, and it is especially impressive to see how …

Equities briefly tagged their twenty-day moving averages last week, only to partially recover on the last day of the quarter. Indeed, the S&P 500 (SPY) closed up +0.8% and +3.0% higher for the week and month (4-weeks), respectively. A nearest neighbor look ahead going into the summer suggests continued smooth sailing, but at a slower [...]

Summary Last week’s call worked out well: higher close with a mild pullback. For next week we’ve got a mildly bullish signal. In case of a pull-back no more than 2%. Price Action [bullish] Direction: long term up, intermediate-term up Historical ranked volatility: 0.25 – 0.50, bellow mid-point Trend-health: long-term trending environment (TSI >1.65) and intermediate trend [...]

Last week’s slight overbought start precipitated a modest pullback, with the S&P 500 (SPY) finishing lower by -0.5%.  However, sector action was mixed.  Although Energy (XLE) fell back -3.4%, for instance, Consumer Discretionaries (XLY) still managed a bullish advance of +0.7%. Most areas of the market continue to look quite bullish.  My slight concern for [...]

The Omega ratio http://en.wikipedia.org/wiki/Omega_ratio is a relatively new performance metric  invented by Keating and Shadwick. It was designed to be a better way to capture all moments of the distribution to give a fair accounting of the upside versus the downside risk that is superior to the Sharpe Ratio. From a semantic perspective it does truly [...]

Stock price action finally made the leap over 2011 highs to break the heavily watched S&P 500 1,400 level. In-fact, the SPY ETF finished higher by +2.4%. After an FOMC statement excluding mention of “QE3″, the bond complex and precious metals moved strongly downward, registering declines of (TLT) -3.9% and (DBP) -3.6%, respectively. As strong [...]

Blue-lined markup comparison of the March versus January Federal Open Market Committee/ FOMC statements below: Labor & Spending Improving Inflation Stable despite Crude Oil Continued Accommodative Stance Low Rates Expected to Late 2014 No Specific Mention of “QE3″ One Dissent Don’t forget the first reaction is often a fade, but price can move quickly. Also [...]

Look like the SPY is going to open down more than it has dropped any single day so far in 2012.  This can be startling to market participants.  Many may be caught flatfooted.  Of course Tuesday is the #1 day to see a Turnaround.  Bu…

As promised Saturday this is the QQQ study using a simple RSI4 support/resistance trading system over the past 16 months.  Note that the setup inputs are revised to 20 and 88 to accommodate the more volatile nature of the Qs versus the SPY.  The system generates a few more trades than the SPY version and [...]

The holiday-shortened week offered a mixed performance among the major indices. While the S&P 500 (SPY) eked out a slight +0.1% gain with the Apple-driven NASDAQ 100 (QQQ) better still, the Russell 2000 (IWM) waned a significant -2.7%. I suspect these divergences could signal the end to equities lock-step advance. This isn’t to stay I’ve [...]