Saturday, September 29, 2012
IWM has been kicked to slot #10 while TLT has climbed into #3. Note that I've added IEF (bonds) back into the mix and kicked SHY. Additional testing revealed that SHY volatility was extremely low.. in fact too low to provide an effective hedge against equity declines in the same manner as TLT and AGG.
If equities do start to crumble we're going to want as much strength in bonds as we can find and IEF provides considerably more potential that SHY in that regard.
The SPY TrendX (right hand sidebar) indicates the current extreme oversold readings on SPY momentum and mean reversion theory would suggest we're ready for a surge up. It was therefore interesting to watch the real time Tradestation MRSI and DB on Friday when they both flashed LONG signals on QQQ and SPY midday for about an hour before cancelling those signals in the last hour.
Those LONG signals were not active at Friday's close and no new Alerts were posted for Monday.