Saturday, November 10, 2012

T2 Update + more...11.10.12

 Here's the T2 as of Friday's close.  Gold has moved into the number 3 slot but TLT and IEF comtinue to hog the 1,2 positions.  It looked like the bulls were going to dominate on Friday but that fizzle needs to be watched closely.
No new Alerts fired on Friday but the caution here can be seen in the current pairs signals shown below...the active signals are all Long equities and Short volatility.

Given this divergence of signal the STOPPED position of the model remains intact.

The pairs project is still scheduled for the end of the month.  We'll focus on just 4 pairs QQQ/SH, TLT/XLF, XIV/QID and SPY/FXE and use the new Mosaic Pairs Analysis module.  These trade signals can change quickly, with an average excursion of just 6 days and the current signals will be posted daily before the close.

Note that I've also included the HD/LOW pair trade..a classsic battle of the titans....Home Depot versus Lowes...with a great RSQ linearity.

The VXX/XIV pair is as wild as it gets and pits the VIX against its inverse.  Each of these steroid driven ETFs can move 5 or 10 % per day under the right conditions so we use the pair (for now) as a barometer of market momentum only.
For those not familiar with all of  these ETFs they represent the following market sectors:
SPY.. S&P 500
SH ...SPY inverse
QQQ...Nasdaq 100
QID..Nasdaq 100 inverse x2
TLT...20 year treasuries
XLF...Spyder sector financials
VXX..(actually an ETN, not ETF)..VIX proxy
XIV...VIX inverse