New 6 ETF Models...10.10.13

Hope springs eternal today as traders are betting that cool heads will prevail in Washington and we'll get back to business as usual.
Days like this are always instructive for short term traders since they provide a good look at where the buying energy (or short selling) is strongest and momentum is likely to persists for at least a few days.

In the meantime, while we wait out an actual resolution of the current financial squabbles, here is the suite of three 6 ETF models that can be plugged into the T6 platform.  I've talked about most of them already in previous posts but there have been a few refinements along the way and release of the new version of the Mosaic platform is fast approaching to help users identify money management thresholds.

Don't forget about the new TrendX charts site where you can track the short term performance of each of these 3 models in real time as well as check out the current SPY behavior.

VEGA...a volatility based model that uses a top 3 sort to better track underlying market momentum.

SMALL WORLD...benchmarked against SPY it looks for opportunities in emerging and foreign markets.

SCHWAB No Fee...also benchmarked against SPY it looks for opportunities in a select portfolio of Schwab commission free ETFs.  There are over 100 Schwab no fee ETFs but volume is tiny in all but a handful and these are some of the most active, with low spreads and quick execution.  Yes, you have to have a Schwab account to get the fees waived, but for smaller accounts the no fee deal makes a lot of sense.

WORLD Update ...10.8.13

Another down day with some nasty selling at the close...which is typically NOT a good omen for the following day unless the boys in Washington somehow regain their sanity and get on with the business of funding the government without the partisan politics that have hampered a solution so far.

At the open it looked like we might have a little buying but the trap door opened and it was all a guessing game from there.

Its important to keep in mind that there are extremely well heeled prop shops out there who can literally manipulate the market trend for short periods of time.  Don't believe it?  Believe it.  I've actually spent time with some of these guys and this is their bread and butter...pushing a stock up with minimal buying so they can sell a much larger existing portfolio of the stock...all at your expense.

Nothing personal...its just business...and the SEC can't do much about it.

Meanwhile the ripple effect of the US economy uncertainty is starting to kick in the WORLD model.
Although EWM looked like it was going to buck the trend the fact is that with today's close all 11 components ended in the red and all have downslope P6 money management stops except EWM...which is flat...so not an opportune time to get VESTED.

SCHWAB no commission model update..10.6.13

Here's an update of the little 6 ETF Schwab no fee model.  Using the T6 platform we note some superior short term returns although the model has now gone to a recommended CASH status.
Worth keeping an eye on when the TrendX signals turn positive.

Using only 6 ETFs also restricts our sector exposure and the trades then to run for a week or more without the need to adjust positions.

GAMMA Update..10.6.13

The markets continue to churn as concerns over the funding block and now the impending debt ceiling cloud the economic crystal ball.  As in previous periods of high uncertainty the opportunities in the market are focused on individual stocks rather than portfolio momentum and as a result we are likely to see a continuing pattern of near hits and misses off short term support/resistance levels until the political morass becomes somewhat clearer.

The looming debt ceiling has extremely serious implications if not resolved in a timely manner.  The whipsaws that we are seeing in the equity and world models (ALPHA and WORLD) also extend to GAMMA, the volatility based model, where the extremes of the spectrum XIV AND SH have shifted their position in the #11 slot in a single day.  Meanwhile SPY continues to ride the #6 slot, the momentum fulcrum, further suggesting that it is the market outliers that represent the best investment choices for now.

With XIV out of the #1 slot we are actually seeing some equity line improvement based on EEM snd QQQ and the short term ALERT is close to a VESTED signal...but not yet.

Watching the Mosaic TrendX Charrts...10.3.13

We're seeing more selling today as the NYSE advance/decline line hits 0.2...a clear bearish level (a value of 1 means equal advancers versus decliners). True worry levels display readings below .1 and can provide bottom fishing opportunities for the more risk loving investors and traders.

If you haven't had a chance to check on the new TrendX charts site you might want to see how these little thumbnails of market momentum can aid in confirming the P6 money management stops embedded in the models.

The main chart...a momentum divergence I term the "VIXEN", is particularly useful for shorter term traders looking to identify trend reversals.  The VIXEN will not catch the tops or the bottoms of  trend reversals but it will provide so called "sweet spot" situations that have a very high probability of success.

I've added the yellow arrows to highlight 2 recent divergence crosses. These charts are free and in real time (5 minute bars).  If you open the site each morning it will update in real time throughout the day without any need to refresh.

X Sectors Update...10.2.13

Today the selling has started to take hold as the talking heads predicted there will be NO QUICK FIX to the current funding deadlock.  This, of course, is pure speculation based on mostly gut feelings from a bunch of guys who have no liability for your capital account...and their forecasts should be regarded accordingly.

The markets continue to deliver a few surprises as the gllom and doom scenario sinks.  Ons such example is the momentum leadership of XRT (retail sector), while XLU (utiltities), which is generally regarded as a safe haven sector, languish at the far end of the relative strength spectrum.

As with virtually all the other models CASH is the current position status indicated by the various P6 risk management stops.

A Rally Surprise...10.1.13

Well...that was a surprise, but at least the statisticians were happy that the first day of the month was bullish.
Based on today's action we might wish for more govt. shutdowns to push the markets even higher.

OK...seriously...we may assume that short sellers had established overweight positions going into last night's failed funding conclusion. On a heels of merely moderate buying this morning the we can then surmise that many short sellers were likely squeezed into covering their positions, thus pushing the markets even higher....although the markets did manage to sustain an impressive net gain for the day volume was light.
At this point the markets have become a betting game more than an exercise in economic fundamentals and corporate metrics lending further credence to the model's CASH status.

This view is supported by the current state of the ALPHA model which is just biding time in CASH as we await the next bullish sector trend.  It certainty wasn't GLD or SLV, both of which were heavily hit in today's action, along with bonds.

The short term TrendX Alert looks more like a DNA sequence that a momentum guide and reflects the lack of leadership among any of the ALPHA components.

This "going no where fast" status of the portfolio is reinforced by both the pairs momentum study and the 2 longer term TrendX studies below.