The NYSE Bullish % has reversed up but that alone is not an all clear over the medium-term. More of a base is necessary or strong upside follow-through (to above 50%). Portfolio remains cautious equity funds.
This Week's Trades
Note - Trades will be executed on today's close.
US Equity Indices
The Midcap Index Trust (MDY) is weak this afternoon and deteriorating from just beneath its two key moving averages. Momentum is no longer oversold with the recent bounce. Relative ratio reflects underperformance against the large caps since June.
US Sector Indices
The Consumer Staples fund this week pushed out to its best level since early February. The relative ratio showed strong outperformance during the October volatility, proving the defensive attraction of the fund.
Other Developed Indices
The Hong Kong ETF bounced from oversold with the start of this month, running into resistance from the 50-day exponential moving average. Trading is now weakening, resuming the 2018 downtrend. Momentum is not oversold.
The United Kingdom Index has also encountered resistance from its falling 50-day exponential moving average. With momentum back to neutral, the chart is positioned for a downside reassertion. The relative ratio, versus the U.S. market is also rolling over.
The Emerging Markets fund has encountered resistance from its 50-day average and is vulnerable to breaking lower, as it did on previous tests over the past several months. The 14-day RSI is rolling over from neutral.
The United States Oil fund has trended down persistently since a 52-week high at the start of October. The lack of a sizeable bounce has created an oversold condition. The 200-day moving average has broken. Should an oversold bounce develop, watch for an underside test of that average.
The US 20+ year Bond fund is slipping to new 3 year lows. The relative ratio, versus the equity market is also weak plus momentum is not oversold. Weakness expected to continue.
Model Portfolio Notes
Opening of positions – Positions are opened on the immediate closing price following the report.
Stops - Two flash crashes (2010, 2015) and occasional bad prices have forced us to drop strict stops. Positons will no longer be stopped out but we shall suggest a region as to where we MAY exit.
Closures - With positions not being stopped out, we shall only exit positions via advice in the report. When we exit a trade, the next closing price is used.
Allocation – Each trade is allocated 5% of the portfolio.
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