ETF Prophet

Well, it’s almost there according to Project Z readings.  TLT has had a nice run up lately and the Double 3s setup is actually calling a new Long signal.  But you know me..I’ve always got one foot out the door and the Z Score indicator, which has been 78% reliable over the last 16 months, [...]

Sometimes a picture (or 2) is worth a thousand words so here are two views of the SLV/XLF pair trade setup with an equity curve that should make any pair trader worth his salt take notice.  I’ve set the optimization routine to the new “z-rank” option and leave it to active subscribers to engage the [...]

Just a heads up for TLT traders.  The PDQ is pretty bearish on the bond ETF and if we check the relative gains for each side of the pair trades a dominant pattern appears.  The PDQ, as we all know by now, tends to predict the next day’s momentum, so be advised.  The only caveat for [...]

A quick update of the latest Lazy Man Rotator pick for the week…. it’s XLB, a familiar name that’s been the Rotator choice since mid-March.  The underlying chart (shade) is our SPY benchmark, which has been a close performance competitor to XLB and has demonstrated a tad less volatility but, short term, the Lazy Man [...]

Professional trader and financial blogger Rob Hanna of Quantifiable Edges fame today recounted Bill Luby’s VIX:VXV ratio, which compares near to intermediate-term volatility structures.  This reminded me of a close cousin indicator, the “3:10 Historic Volatility Indicator,” which I also first read about on Rob’s site (link).  As its name suggests, the Offset compares volatility [...]

Prophet reader “Rob” commented that he was impressed with the SMH:SLV pair so this seemed like a good time to discuss why it’s important to look closer at such apparent high performance trades to understand what’s really going on.  Above is the ETF Rewind Pair Analysis showing the characteristics of the pair trades and displaying a [...]

The Market Rewind Pairs Analysis is still one of the most robust and reliable parts of my trader’s toolbox.  Here’s a look at the UUP/FXE pair (currently no open position) but a quick look at Section C shows UUP poised to make a move up.  The equity curve has maintained a smooth slope from inception [...]

I was updating the PDQ this weekend and have added USO to the portfolio model to aid crude traders.  Thursday’s pre-close signal was solid red in the Final Signal column, whereas a midday update of the file hints at a possible bounce.  We basically have 2 separate timing models here (Target Days), one in the [...]

VIX 18 calls due to expire on Wednesday were $ .30 on Friday and …. hold it…$ 1.25 at today’s open. Long overdue for a bump, The VIX spiked over 20% at the open, which was the best time to close any VIX longs.  Meanwhile, back at the ranch, the Lazy Man portfolio is solid [...]

GDX was the biggest loser in the Lazy Man portfolio today and at Friday’s close was solid red in the Final Signal column of the PDQ.  Note that the average Target Days excursion is 3 days and the Days In number is 4 on the current Short trade positions. As of today’s close we have [...]

Looking at the 3 day bars of the Lazy Man portfolio XLB is maintaining a momentum edge but, in sync with Friday’s DIA prognosis, the odds favor a rollover for the Shorts.  The VIX is negative this morning as are most of the major indices.  This type of divergence can’t last long even on expiration [...]

Throughout my strategy building I’ve noticed these big eye sores: It hurts to see a trade going good and hitting the skids without stopping the bleeding early.

Project Z is alive!  Hard to believe as we are basically a year behind in our schedule to release the sine qua non for traders but life’s quirks have have an uncanny way of  noodling up even the best laid plans and intentions. That being said, yesterday’s EOD ushered in a new short signal at the close.  [...]

One of the daily default updates provided by the ETFR Pairs Analysis is the XLF/TLT spread.  This is a quickie model with an average excursion time of just 3 days exhibiting a very linear correlation over the past 6 months. Traders are advised to pay close attention to the trigger signals and not dally when [...]

At 16.90 as of today’s close the VIX is testing its near term lower band limits.  EEM has continued to lead the way up in the Lazy Man portfolio as TLT experienced a significant sell off, falling off the 92.50 line of support we mentioned last week.  Big POMO on Thursday, but then nothing until [...]

Here’s the pure Lazy Man portfolio with SPY as the focus ETF.  EEM has been the hands down leader for the past 2 weeks followed by SPY although today we saw XLB break to the upside while both EEM and SPY closed in the red. The Prognosticator is showing SPY leveling off but not yet in [...]

Just thought I’d put things in perspective a bit by showing the relative turn in the VIX on daily bars.  The bulls have a lot going for them, mojo POMO, strong momentum and EEM and XLB (Hey!, the Qs and SPY are tracking right along too), but the VIX is ominous in its current position.  [...]