Thursday, December 12, 2013

TrendX Approaches Support Level..12.12.13

Another triple digit down day has put the SPY close to mid term support levels.....see Trendx panel at the right>>>>>>>. That's the hopeful view

On the dismal side ..once again the international stocks EEM and EFA got battered although EWJ (Japan) managed to eek out a small gain and bears keeping a eye on as a potential mover.  We're seeing a number of index ETFs and stocks in a roll over pattern...which is typically a harbinger of more downside to come and I reiterate my observation yesterday that the NYAD still has no sign of a capitulation ...with the expectation of values below .10 before a meaningful bottom.

So what's a guy (or gal) to do when the market teeters?
In a conference call today with a client we discussed the outlook for oil and gas and associated ETFs.  Since I'm not a registered investment advisor I can't legally recommend issues to buy or sell so I'll simply display what I showed to the client...a variation of the M3 SPY Trader using UNG (natural gas) and USO (US Oil Fund) in lieu of XIV and SSO. 
You could also use XLE for the benchmark to get a clearer view of the petro sector performance.

The results are pretty interesting and reflect our ideal trading plan....a continued sequential alignment of the rankings..hence few trades and a nice linear equity curve.
Here's a surprise...there's a number of these nugget setups out there just have to find them.
This also demonstrates the efficiency of the M3're either vested or in cash without a very small portfolio (3 issues to manage).
Current Mosaic users still have the opportunity to purchase the new M3 platform at a reduced rate.