Seeking Alpha with SPY...1.8.14

Alpha refers to the incremental value that can be added to a benchmark portfolio by engaging any variety of money management tools and tactics.  For almost all of our tested models SPY has been used as that benchmark...generally the highest volume ETF on any given day and indicative of the performance of the the biggest 500 S&P companies measured by capitalization.
Its a hard act to follow, as they say, and the question is often asked..."why not just trade SPY?"

This question is, in fact, the underlying reason that the M3 platform was developed.  Its momentum and relative strength algorithms are faster than the M6 platform and much faster than the M11/T11 platform.  M3's pairs charts are configured somewhat differently than M6 and the overall time frame is just 6 months to reflect the trading versus investing intent of the platform.

While all the platforms benefit from close observation of money management stops, with M3 its absolutely critical to follow the signals....that's due in a large part to the increased volatility risk incurred by trading XIV and SSO.  Caveat emptor!!!!

Here's the current report with the AUTO STOP turned on.  Recent results have been stellar based largely on the almost bizarre behavior of XIV relative to SPY...but M3 successfully saw through the market fog and showed the path.

Cramer's 2014 Picks...1.7.14

Jim Cramer came out with a list of stocks he expects to excel in 2014 on January 2nd.  Love him or hate him, Cramer does move the markets and has made some great calls.  These are his top picks culled from a somewhat longer list and reduced to a basket of 10 stocks plus SPY as our benchmark.

Just for fun we'll periodically track the Cramer file through 2014 to review portfolio performance using a top 1 and top 2 sort as well as how the portfolio stacks up against SPY.  You never know when you'll run across a real investment nugget....maybe this is one.

As a starting point and employing the advantage of hindsight I've included how the portfolio components fared in 2013 before their selection by Cramer.

Keep in mind these are stocks, not ETFs, so we should expect volatility to substantially exceed SPY.

VIX Falls with SPY....1.6.14

The VIX ran in parallel with the SPY today...both down.  That's unusual to say the least, especially given the size of weakness in SPY.  Regarding the VIX...here's an interesting piece of the rise in the trading of VIX related issues...which also translates to the VIX inverse XIV.

The divergence of SPY and XIV can be seen more clearly on the M3 SPY Trader..  Meanwhile SPY continues on a slow churn down with a failure of a late afternoon rally...leaving SPY in a distinctly negative zone.

2013 Review....1.5.14

In hindsight all a guy had to do was buy and hold and buy and hold and buy and hold for 2013...just ladder on up each month for stellar returns.  Unfortunately, there's no crystal ball and the left side of the chart is only a relative measure of risk for longer term investors.

SO, how did some of the Mosaic models fare in 2013?

Here's a look at the M11 SPYDER X sectors, the latest M6 models and the ole Lazy Man weekly T2.
Keep in mind that these performance results reflect the use of no money management stops ...just what would have happened if the rotational signals had been followed. 

Using a top 2 sort this model actually under performed the SPY by a few points although overall volatility was approximately 50% of SPY. 

Next the M6 models using a top 2 sort:

Same story as M11...which makes sense since VEGA attempts to cover the whole US market with just 5 ETFs measured against SPY.  The advantage here was the extremely low volatility of the model versus SPY.

The Small World model did outperform SPY and was characterized by extended runs in the top ranked

ETFs.  Both the short and long term metrics look attractive although the shorter term volatility has been a bit choppy.

Now the Schwab no fee model...Not an endorsement for Schwab...but no fees........
The model followed SPY closely, again with sustained runs in the top ranked ETFs.  

Once again, the results of these models reflect NO MONEY MANAGEMENT STOPS.  Although the markets were solidly upslope all year there were clear periods of retracement when it was possible to scalp off an additional 10% or more depending on the aggressiveness of your trading following the P6, RSQ and other embedded stops.

Finally the weekly traded Lazy Man .....with a market neutral blend of ETFs:

A little hard to see unless you blow it up on your screen but this was actually the best deal of the year.
Results are shown for the past 7 years and you recently received the platform as part of the Yahoo snafu so you can try out other blends that may be more reflective of your interests. 
Worth a look if you like the Lazy Man pace,

Next week we'll consider whether superior returns and money management can be achieved by simply trading SPY with M3 in lieu of a sector basket.

DOWN!!!!........1.2.14

There was no relief from the downdraft today in the face of increasing volume.  We have now gone from extreme overbought from moderately oversold status in one day. 
Note the position of the SPY TrendX in the right panel>>>>>>>>>>>

The bullish trend is clearly off the table for now as we wait for the next developments.

MID DAY ALERT....1.2.14

Mid day and its looking like the technicals ahve finally caught up with the markets. 
So much for Friday's bullish surge...

All registered users should have received the new 2014 M3, M6 and M11 files with the new Yahoo embedded data feed link. 

Note that for premium subscribers I have included the updated M6 Small World and Vega versions of the platform at no charge just to make up for any hassle the Yahoo snafu may have caused.

Some subscribers have multiple email addresses and the new files were sent to all default addresses.
If you have not received the new files please send me an email at  etfmosaic@aol.com so I can get the files to the proper site.

Year End Surge... 12.31.13

Last day of the year saw a surge into the close, now taking all the indices into extreme overbought territory.  The last hour of the day saw incredible buying strength and ended with SPY as the highs of the day...that's bullish.   From a technical standpoint the markets SHOULD go down next but what's going to drive that?  All the recent economic news has been positive lately and a simple buy and hold strategy has matched a more actively traded account. 

If the models aren't updating its due to problems with the Yahoo data feed...hopefully they will sort that out quickly so we can get back to business.  In the meantime the TrendX site should keep you on the right side of the markets.  

Although a 5-8% pullback has been widely anticipated in the media the markets are famous for frustrating even the "smartest" investors so the game is still afoot. 
Best to just stick with the plan, which for now remains bullish until proven otherwise.

Happy New Year to all with hopes for a prosperous 2014.

This weekend we'll look at some of the lessons learned from 2013 and formulate a brief investment plan for 2014.