Index & Sector ETF Signals - 1/20/2017 Update

TrendFlex signals for the major index and sector SPDR ETF's below are based on a trend-following system filtered to identify the "risk" to a change in the trend. 

Major Index ETF's 

 Symbol  Trend

Trend Change Risk

Notes
 DIA Bullish Med Trading-range pattern, looking to break out 
 SPY  Bullish Med  Trading-range pattern, looking to break out
 QQQ Bullish Med New highs 
 IWM Bullish Med  Trading-range pattern, looking to break out
 DBA Bearish Lo Rally looking tired
 GLD Bullish Low Positive moving average cross 
 VGK Bullish Low Positive momentum; firm uptrend
 UUP Bullish Low Modest retracement; attractive entry 
 TLT Bearish Med Testing December lows
EEM Bullish Low Resumption of uptrend


 Sector SPDR ETF's

 Symbol  Trend

Trend Change Risk

Notes
XLK Bullish Med New highs 
XLU Bullish Hi Consolidating recent gains
XLI  Bullish Med Trading-range pattern, looking to break out 
XLB Bullish Low Trading-range pattern, looking to break out 
XLV  Bullish Low Slowly returning to an uptrend 
XLE Bullish Low Attractive entry 
XLP  Bullish Low Uptrend firming; attractive entry
XLY Bullish Med Overbought 
XLF  Bullish Med Trading-range pattern, looking to break out


 

ETF Wrapper Reports

Baseline Analytics searchable Excel files representing the results of proprietary screeners applied to MetaStock software to identify technical patterns that suggest timely trading opportunities. Click on the wrapper   icon in the table below to download the Excel report, which includes instructions to find ideal setups.  Date represents data from that day's market close.  Visit frequently, as this table is updated throughout the week.

Wrapper Name Description Wrapper Link Date
Bullish ETF's ETF's trading in an uptrend, not overbought, actively-traded, price>$10. Excludes leveraged ETF's wrapper 12/02/16

ETF Technical Leaders

The following table represents ETF's that are in bullish trends and represent technically attractive reward-to-risk entry points (for example, we will shy away from adding an overbought ETF). Although these ETF selections have been pre-screened, investors are advised to pursue their own research to determine whether they are appropriate for their portfolios. Selections are time-sensitive and represent short-term swing trading opportunities that may or may not follow-through on a longer-term basis. In addition, selections may be voided once a market trend change has occurred based on the TrendFlex signals. Visit our FAQ's  for more suggestions regarding ETF Zone. Check back frequently as additional ETF's may be added to the week's list. 

Symbol Rationale Close Date Added
EWI iShares Italy ETF inexpensive and possible long-term bottom formed 22.13 12/02/16
XLY Retracement from recent gains; attractive entry point 81.44 12/02/16 
XLV  Post-election catch-up;  nearing positive moving avg. cross (50 over 200 day)  70.49 11/11/16 

 

Allocation Strategy is updated on a bi-weekly basis, and takes a longer-term view consistent with the TrendFlex Allegiance system. Allocations are based on a blend of macro-economic trends and technical analysis, and incorporate the insight of our Thought Leaders as expressed on the Baseline Analytics website, and our ETF Signals analysis.  Portfolio allocation corresponds to an investor profile of moderate risk and a 20-year investment horizon.  Updates to Asset Allocation may be issued more frequently depending on market conditions.

Asset Allocation Strategy - 1/13/2017   

Instrument 

Underweight

Neutral

Overweight

Equities            
Fixed Income            ♦       
Alternatives      ♦      
Cash          

Equities

Style

Large Caps      
   
Mid Caps          
Small Caps         ♦    

Sector

Staples           
Discretionary           
Technology          
Utilities    
     
Industrials          
Healthcare      
   
Materials        
Financials          
Energy      
   
Regions     
US          
Eurozone          
China    
     
India          
Japan          
Emerging Asia          
EMEA          
Latin America          

Fixed Income

Investment Grade          
High Yield          
Developed Market          
Emerging Market          
Treasuries          
TIPS          
Municipal          

Alternatives

Commodities          
Absolute Return        
REITS      
Convertible Bonds      
Continue reading
1471 Hits

Growth vs. Value: Trend Shift in the Works?

Growth stocks, as represented by the Russell 2000 Growth Index, have generally outperformed value stocks since mid-2010 (see the chart below, denoted by the green boxes). Since the start of 2016, however, value has outperformed growth, as can be seen by the large red box on the right side of the chart.

A 50-day exponential moving average is employed to demonstrate the price activity in favor of one versus the other.  What is interesting on the chart is the top portion, which shows the RSI of the Growth/Value stock ratio.  That RSI was deeply oversold and has crossed above the 30 level, a bullish development.  This may be an indication of a shift in sentiment back toward growth stocks.

 

GV

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1189 Hits

Gold Miner's Technicals - An Interesting Setup?

Gold and the Gold Miner's ETF (GDX) have been despised for quite a while.  It is often when an investment is shunned and ignored, that it is ripe for a shift in sentiment and price.  

Looking at the VanEck Vectors Gold Miners ETF (GDX), it is interesting to note that price has bounced from a long-term support level near 20 (see the monthly chart below) 

 GDX Mon

Also noteworthy, on the daily chart, the GDX has closed above its 50-day exponential moving average. GDX rallied from its recent lows near 19 on decent volume.

GDX daily

So we could be looking at a profitable turning point in GDX (and gold in general). Perhaps volatility and uncertainty regarding the new administration or even some early signs of price growth in the inflation readings, are influencing this recent price behavior. 

 

Continue reading
1212 Hits

TrendFlex Score & TrendFlex Signals for 1/13/2017

  Follow for TrendFlex Signal and Blog Update Alerts!

TrendFlex Credit Risk Premium Signals (CR)

TrendFlex Classic CR and Allegiance signals remains Long, as the major indices continue to flirt with new highs.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 11/08/16 +6.3% +6.3%
TrendFlex Allegiance CR Long 4/13/16 +12.6% +12.6%
Historic Performance        

 

TrendFlex Score

The TrendFlex Score increased from 1.37 to 1.41 and is slightly above its three-week moving average (barely bearish).  

TFS01132017

TrendFlex Trend-Following Signals (TF)

The TrendFlex Classic TF and Allegiance signals remain in Uptrend.     

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF  Uptrend 11/8/16 6.3% 6.3% 1.125
TrendFlex Allegiance TF Uptrend 5/31/16 8.3% 8.3% 1.125
Historic Performance          

 

Baseline Analytics Extremes

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. TED Spread
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow.

The VIX indicator (below) remains at an extreme reading, partly offset by a neutral reading on Put/Call.  The other two Extremes indicators are neutral.  

VIX01132017

The Portfolio Strategies chart remains bullish, with an edge toward risk-aversion.      

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
775 Hits

Index & Sector ETF Signals - 1/13/17 Update

TrendFlex signals for the major index and sector SPDR ETF's below are based on a trend-following system filtered to identify the "risk" to a change in the trend. 

Major Index ETF's 

 Symbol  Trend

Trend Change Risk

Notes
 DIA Bullish Med Trading-range pattern, looking to break out 
 SPY  Bullish Med  Trading-range pattern, looking to break out
 QQQ Bullish Med New highs 
 IWM Bullish Med  Trading-range pattern, looking to break out
 DBA Bearish Lo Rally looking tired
 GLD Bearish Low Overbought 
 VGK Bullish Low Positive momentum; firm uptrend
 UUP Bullish Low Modest retracement; attractive entry 
 TLT Bearish Med Oversold 
EEM Bullish Low Resumption of uptrend


 Sector SPDR ETF's

 Symbol  Trend

Trend Change Risk

Notes
XLK Bullish Med New highs 
XLU Bullish Hi Consolidating recent gains
XLI  Bullish Med Trading-range pattern, looking to break out 
XLB Bullish Low Trading-range pattern, looking to break out 
XLV  Bullish Low Slowly returning to an uptrend 
XLE Bullish Low  
XLP  Bullish Med Uptrend looking tired
XLY Bullish Med  
XLF  Bullish Med Trading-range pattern, looking to break out


 

ETF Wrapper Reports

Baseline Analytics searchable Excel files representing the results of proprietary screeners applied to MetaStock software to identify technical patterns that suggest timely trading opportunities. Click on the wrapper   icon in the table below to download the Excel report, which includes instructions to find ideal setups.  Date represents data from that day's market close.  Visit frequently, as this table is updated throughout the week.

Wrapper Name Description Wrapper Link Date
Bullish ETF's ETF's trading in an uptrend, not overbought, actively-traded, price>$10. Excludes leveraged ETF's wrapper 12/02/16

ETF Technical Leaders

The following table represents ETF's that are in bullish trends and represent technically attractive reward-to-risk entry points (for example, we will shy away from adding an overbought ETF). Although these ETF selections have been pre-screened, investors are advised to pursue their own research to determine whether they are appropriate for their portfolios. Selections are time-sensitive and represent short-term swing trading opportunities that may or may not follow-through on a longer-term basis. In addition, selections may be voided once a market trend change has occurred based on the TrendFlex signals. Visit our FAQ's  for more suggestions regarding ETF Zone. Check back frequently as additional ETF's may be added to the week's list. 

Symbol Rationale Close Date Added
EWI iShares Italy ETF inexpensive and possible long-term bottom formed 22.13 12/02/16
XLY Retracement from recent gains; attractive entry point 81.44 12/02/16 
XLV  Post-election catch-up;  nearing positive moving avg. cross (50 over 200 day)  70.49 11/11/16 

 

Allocation Strategy is updated on a bi-weekly basis, and takes a longer-term view consistent with the TrendFlex Allegiance system. Allocations are based on a blend of macro-economic trends and technical analysis, and incorporate the insight of our Thought Leaders as expressed on the Baseline Analytics website, and our ETF Signals analysis.  Portfolio allocation corresponds to an investor profile of moderate risk and a 20-year investment horizon.  Updates to Asset Allocation may be issued more frequently depending on market conditions.

Asset Allocation Strategy - 1/13/2017   

Instrument 

Underweight

Neutral

Overweight

Equities            
Fixed Income            ♦       
Alternatives      ♦      
Cash          

Equities

Style

Large Caps      
   
Mid Caps          
Small Caps         ♦    

Sector

Staples           
Discretionary           
Technology          
Utilities    
     
Industrials          
Healthcare      
   
Materials        
Financials          
Energy      
   
Regions     
US          
Eurozone          
China    
     
India          
Japan          
Emerging Asia          
EMEA          
Latin America          

Fixed Income

Investment Grade          
High Yield          
Developed Market          
Emerging Market          
Treasuries          
TIPS          
Municipal          

Alternatives

Commodities          
Absolute Return        
REITS      
Convertible Bonds      
Continue reading
1338 Hits

TrendFlex Score & TrendFlex Signals for 1/6/2017

  Follow for TrendFlex Signal and Blog Update Alerts!

TrendFlex Credit Risk Premium Signals (CR)

TrendFlex Classic CR and Allegiance signals remains Long, as the major indices continue to flirt with new highs.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 11/08/16 +6.4% +6.4%
TrendFlex Allegiance CR Long 4/13/16 +12.8% +12.8%
Historic Performance        

 

TrendFlex Score

The TrendFlex Score increased from 1.28 (12/30/16) to 1.37 and remains about even with its three-week moving average.  It continues to rest at a level that in the past has preceded setbacks in equities.

TFS01062017

TrendFlex Trend-Following Signals (TF)

The TrendFlex Classic TF and Allegiance signals remain in Uptrend.     

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF  Uptrend 11/8/16 6.4% 6.4% 1.00
TrendFlex Allegiance TF Uptrend 5/31/16 8.4% 8.4% 1.00
Historic Performance          

 

Baseline Analytics Extremes

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. TED Spread
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow.

The large gap in the LQD/SPX ratio vs. its moving average that was previously printed in late December has narrowed to a non-extreme reading. The TED Spread is also neutral. The VIX indicator (below) has shifted to an extreme reading.  

VIX01062017

The Portfolio Strategies chart remains bullish. Hedges to long positions are in order given the extreme market readings and the low TrendFlex Score.  We would refrain from adding longs, waiting for a breather in the markets.      

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
737 Hits

Index & Sector ETF Signals - 1/6/17 Update

TrendFlex signals for the major index and sector SPDR ETF's below are based on a trend-following system filtered to identify the "risk" to a change in the trend. 

Major Index ETF's 

 Symbol  Trend

Trend Change Risk

Notes
 DIA Bullish Med  
 SPY  Bullish Med  
 QQQ Bullish Med  
 IWM Bullish Low  
 DBA Bearish Hi Bottoming process 
 GLD Bearish Med  
 VGK Bullish Low Positive momentum; firm uptrend
 UUP Bullish Low  
 TLT Bearish Med Oversold 
EEM Bullish Low Firm uptrend


 Sector SPDR ETF's

 Symbol  Trend

Trend Change Risk

Notes
XLK Bullish Med  
XLU Bullish Med Resuming its uptrend 
XLI  Bullish Med  
XLB Bullish Low  
XLV  Bullish Low  
XLE Bullish Low  
XLP  Bullish Low Uptrend catching on 
XLY Bullish Med  
XLF  Bullish Med  


 

ETF Wrapper Reports

Baseline Analytics searchable Excel files representing the results of proprietary screeners applied to MetaStock software to identify technical patterns that suggest timely trading opportunities. Click on the wrapper   icon in the table below to download the Excel report, which includes instructions to find ideal setups.  Date represents data from that day's market close.  Visit frequently, as this table is updated throughout the week.

Wrapper Name Description Wrapper Link Date
Bullish ETF's ETF's trading in an uptrend, not overbought, actively-traded, price>$10. Excludes leveraged ETF's wrapper 12/02/16

ETF Technical Leaders

The following table represents ETF's that are in bullish trends and represent technically attractive reward-to-risk entry points (for example, we will shy away from adding an overbought ETF). Although these ETF selections have been pre-screened, investors are advised to pursue their own research to determine whether they are appropriate for their portfolios. Selections are time-sensitive and represent short-term swing trading opportunities that may or may not follow-through on a longer-term basis. In addition, selections may be voided once a market trend change has occurred based on the TrendFlex signals. Visit our FAQ's  for more suggestions regarding ETF Zone. Check back frequently as additional ETF's may be added to the week's list. 

Symbol Rationale Close Date Added
EWI iShares Italy ETF inexpensive and possible long-term bottom formed 22.13 12/02/16
XLY Retracement from recent gains; attractive entry point 81.44 12/02/16 
XLV  Post-election catch-up;  nearing positive moving avg. cross (50 over 200 day)  70.49 11/11/16 

 

Allocation Strategy is updated on a bi-weekly basis, and takes a longer-term view consistent with the TrendFlex Allegiance system. Allocations are based on a blend of macro-economic trends and technical analysis, and incorporate the insight of our Thought Leaders as expressed on the Baseline Analytics website, and our ETF Signals analysis.  Portfolio allocation corresponds to an investor profile of moderate risk and a 20-year investment horizon.  Updates to Asset Allocation may be issued more frequently depending on market conditions.

Asset Allocation Strategy - 1/1/2017   

Instrument 

Underweight

Neutral

Overweight

Equities            
Fixed Income            ♦       
Alternatives      ♦      
Cash          

Equities

Style

Large Caps      
   
Mid Caps          
Small Caps         ♦    

Sector

Staples           
Discretionary           
Technology          
Utilities    
     
Industrials          
Healthcare      
   
Materials        
Financials          
Energy      
   
Regions     
US          
Eurozone          
China    
     
India          
Japan          
Emerging Asia          
EMEA          
Latin America          

Fixed Income

Investment Grade          
High Yield          
Developed Market          
Emerging Market          
Treasuries          
TIPS          
Municipal          

Alternatives

Commodities          
Absolute Return        
REITS      
Convertible Bonds      
Continue reading
1229 Hits

TrendFlex Market Trend Risk Assessment - 12/27/2016

As equities reach new highs, several market trend risk indicators as measured by our proprietary TrendFlex system are underscoring the risk to long positions at this stage of the rally.

Our flagship TrendFlex Classis CR (credit risk premium indicator) is about as bullish (for equities) as it can be, which can be interpreted as a contrarian signal.  We are firm believers in "reversion to the mean," and as the chart below suggests, the wide gap between the ratio of corporate vs. treasury debt versus its moving average (dotted line) calls for a possible pause in the equity uptrend.

TFCCR12232016

The weekly version of the TrendFlex CR similarly demonstrates today's extreme readings:

TFACR12232016

No doubt that the charts above are wildly bullish.  Although we are trend followers, we take very seriously the indicators that measure the risk of a trend change.  

Baseline Analytics Extremes highlights three key TrendFlex Indicators and their level of extremes.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. TED Spread
  3. LQD vs. S&P 500 GAP reading

Here is what these indicators are telling us, following the market close of 12/23/16.

The Vix/Put Call Gap versus their respective moving averages measures complacency among traders and investors. Note the VIX (top portion of chart below) falling well below its moving average.  As can be seen on the chart, such gaps below (and above) its moving average tend to precede shifts in the S&P 500. VIX is hinting at a potential setback in equities.  Interestingly, the Put/Call ratio is neutral.

VIX12232016

The TED Spread is a measure of perceived credit risk in the US Economy.  Peaks in the spread (see blue areas in bottom of chart below).  This indicator has preceded shifts in the market trend rather consistently over the timeframe displayed below.  It may be hinting at a firming of Treasuries following their rather sharp selloff since peaking in July.

TED12232016 

Finally, the gap between our LQD/S&P 500 ratio (a derivative of the Trendflex CR indicator) is sitting at an extreme low (see bottom portion of chart below).  This large gap suggests that equities have moved too far too fast and are in needs of a consolidation of recent returns.  

LQD Gap 12232016

We have also previously noted the progress in the Dow Theory technical indicator.  The two indices  (Dow Jones Industrial Average and Dow Transportation Index) recently hit new highs, a traditional technical measure of a confirmed bull market.  Again, however, we harken to a cautious stance given the swiftness of this move upward and the extreme readings in our various indicators.

Dow122316

What to do? Think about wading into long positions in instruments that have swooned during this uptrend (perhaps small positions in bonds, gold, agricultural commodities) to diversify and dollar-cost average.  Europe and emerging markets are also beginning to look interesting (perhaps VGK and EEM will play catch-up to the US). Hedging long positions with e-Mini S&P 500 futures may be in order, as well as selling call options.  

Equities have tended to do well in the week before the holidays and afterward, but have consistently slipped as the new year dawns.  We would rather hedge our bets and look for prices to settle down before adding to long positions, as the major indices, although overbought, are clearly bullish.  

Best to your investing, and Happy New Year!

Continue reading
760 Hits

TrendFlex Score & TrendFlex Signals for 12/23/2016

No Updates planned for 12/30 market close.

  Follow for TrendFlex Signal and Blog Update Alerts!

TrendFlex Credit Risk Premium Signals (CR)

TrendFlex Classic CR and Allegiance signals remains Long, as the major indices continue to flirt with new highs.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 11/08/16 +5.8% +5.8%
TrendFlex Allegiance CR Long 4/13/16 +12.1% +12.1%
Historic Performance        

 

TrendFlex Score

The TrendFlex Score decreased from 1.30 to 1.28 and remains below its three-week moving average.  It is resting at a level that in the past has preceded setbacks in equities.

TFS12232016 

TrendFlex Trend-Following Signals (TF)

The TrendFlex Classic TF and Allegiance signals remain in Uptrend.     

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF  Cash 9/26/16 5.8% 5.8% 1.20
TrendFlex Allegiance TF Uptrend 5/31/16 7.8% 7.8% 1.25
Historic Performance          

 

Baseline Analytics Extremes

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. TED Spread
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow.

LQD Gap 12232016

A large gap in the LQD/SPX ratio vs. its moving average gets larger, suggesting that the recent rally may need a breather. The VIX indicator (below) has shifted to an extreme reading. 

VIX12232016

The TED Spread indicator has moved toward an extreme reading.

TED12232016

The Portfolio Strategies chart remains bullish. Hedges to long positions are in order given the extreme market readings and the low TrendFlex Score.  We would refrain from adding longs, waiting for a breather in the markets.      

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
722 Hits

Index & Sector ETF Signals - 12/23/16 Update

No Updates planned for 12/30 market close.

TrendFlex signals for the major index and sector SPDR ETF's below are based on a trend-following system filtered to identify the "risk" to a change in the trend. 

Major Index ETF's 

 Symbol  Trend

Trend Change Risk

Notes
 DIA Bullish High Overbought 
 SPY  Bullish Med  
 QQQ Bullish Med  
 IWM Bullish Low  
 DBA Bearish Med Bottoming process 
 GLD Bearish Med 100-102 major support; attractive cost-avg. entry 
 VGK Bullish Low Positive momentum; nice entry point 
 UUP Bullish Low  
 TLT Bearish Hi Oversold 
EEM Bearish Med Laggard searching for a bottom 


 Sector SPDR ETF's

 Symbol  Trend

Trend Change Risk

Notes
XLK Bullish Low  
XLU Neutral Hi Resuming its uptrend 
XLI  Bullish High  
XLB Bullish Low  
XLV  Bullish Low Attractive entry 
XLE Bullish Low Overbought 
XLP  Bullish Low New uptrend 
XLY Bullish Med  
XLF  Bullish Med Overbought 


 

ETF Wrapper Reports

Baseline Analytics searchable Excel files representing the results of proprietary screeners applied to MetaStock software to identify technical patterns that suggest timely trading opportunities. Click on the wrapper   icon in the table below to download the Excel report, which includes instructions to find ideal setups.  Date represents data from that day's market close.  Visit frequently, as this table is updated throughout the week.

Wrapper Name Description Wrapper Link Date
Bullish ETF's ETF's trading in an uptrend, not overbought, actively-traded, price>$10. Excludes leveraged ETF's wrapper 12/02/16

ETF Technical Leaders

The following table represents ETF's that are in bullish trends and represent technically attractive reward-to-risk entry points (for example, we will shy away from adding an overbought ETF). Although these ETF selections have been pre-screened, investors are advised to pursue their own research to determine whether they are appropriate for their portfolios. Selections are time-sensitive and represent short-term swing trading opportunities that may or may not follow-through on a longer-term basis. In addition, selections may be voided once a market trend change has occurred based on the TrendFlex signals. Visit our FAQ's  for more suggestions regarding ETF Zone. Check back frequently as additional ETF's may be added to the week's list. 

Symbol Rationale Close Date Added
EWI iShares Italy ETF inexpensive and possible long-term bottom formed 22.13 12/02/16
XLY Retracement from recent gains; attractive entry point 81.44 12/02/16 
XLV  Post-election catch-up;  nearing positive moving avg. cross (50 over 200 day)  70.49 11/11/16 

 

Allocation Strategy is updated on a bi-weekly basis, and takes a longer-term view consistent with the TrendFlex Allegiance system. Allocations are based on a blend of macro-economic trends and technical analysis, and incorporate the insight of our Thought Leaders as expressed on the Baseline Analytics website, and our ETF Signals analysis.  Portfolio allocation corresponds to an investor profile of moderate risk and a 20-year investment horizon.  Updates to Asset Allocation may be issued more frequently depending on market conditions.

Asset Allocation Strategy - 12/16/2016   

Instrument 

Underweight

Neutral

Overweight

Equities            
Fixed Income            ♦       
Alternatives      ♦      
Cash          

Equities

Style

Large Caps      
   
Mid Caps          
Small Caps         ♦    

Sector

Staples           
Discretionary           
Technology          
Utilities    
     
Industrials          
Healthcare      
   
Materials        
Financials          
Energy      
   
Regions     
US          
Eurozone          
China    
     
India          
Japan          
Emerging Asia          
EMEA          
Latin America          

Fixed Income

Investment Grade          
High Yield          
Developed Market          
Emerging Market          
Treasuries          
TIPS          
Municipal          

Alternatives

Commodities          
Absolute Return        
REITS      
Convertible Bonds      
Continue reading
1139 Hits

TrendFlex Score & TrendFlex Signals for 12/16/2016

 

  Follow for TrendFlex Signal and Blog Update Alerts!

TrendFlex Credit Risk Premium Signals (CR)

TrendFlex Classic CR and Allegiance signals remains Long, as the major indices continue to flirt with new highs.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 11/08/16 +5.5% +5.5%
TrendFlex Allegiance CR Long 4/13/16 +11.8% +11.8%
Historic Performance        

 

TrendFlex Score

The TrendFlex Score decreased from 1.33 to 1.30 and remains below its three-week moving average.  It is resting at a level that in the past has preceded setbacks in equities.

TFS12162016 

TrendFlex Trend-Following Signals (TF)

The TrendFlex Classic TF and Allegiance signals remain in Uptrend.  Both remain at a "perfect" 1.0 score.   

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF  Cash 9/26/16 5.5% 5.5% 1.00
TrendFlex Allegiance TF Uptrend 5/31/16 7.5% 7.5% 1.00
Historic Performance          

 

Baseline Analytics Extremes

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. TED Spread
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow.

LQD Gap 121616

A large gap in the LQD/SPX ratio vs. its moving average gets larger, suggesting that the recent rally may need a breather. The VIX Put/Call indicator (below) has settled to a neutral reading. 

VIX12162016

The Portfolio Strategies chart remains bullish. Hedges to long positions are in order given the extreme market readings and the low TrendFlex Score.  We would refrain from adding longs, waiting for a breather in the markets.      

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
684 Hits

Index & Sector ETF Signals - 12/16/16 Update

TrendFlex signals for the major index and sector SPDR ETF's below are based on a trend-following system filtered to identify the "risk" to a change in the trend. 

Major Index ETF's 

 Symbol  Trend

Trend Change Risk

Notes
 DIA Bullish Med Breakout to highs
 SPY  Bullish Med Breakout to highs 
 QQQ Bullish Low Finally catching up to the broader market
 IWM Bullish Low Strong breakout to highs; bullish for equities overall
 DBA Bearish Med Struggling to find a base
 GLD Bearish Med Deeply oversold but technically weak
 VGK Bullish Low Bounced from 40-45 support; crossed 50-day average
 UUP Bullish Low Clear uptrend but overbought
 TLT Bearish Hi Remains near major support near 117; oversold
EEM Bearish Low  Weak technicals; support near 34

 Sector SPDR ETF's

 Symbol  Trend

Trend Change Risk

Notes
XLK Bullish Low  Attractive entry point following setback
XLU Neutral Hi

Oversold; at major support

XLI  Bullish Low Bullish breakout
XLB Bullish Low Bullish breakou; attractive entry point
XLV  Bullish Low Still an attractive entry point 
XLE Bullish Low Overbought
XLP  Bullish Low Uptrend resumed
XLY Bullish Med Bounced as expected; now overbought
XLF  Bullish Med Overbought 

 

 

ETF Wrapper Reports

Baseline Analytics searchable Excel files representing the results of proprietary screeners applied to MetaStock software to identify technical patterns that suggest timely trading opportunities. Click on the wrapper   icon in the table below to download the Excel report, which includes instructions to find ideal setups.  Date represents data from that day's market close.  Visit frequently, as this table is updated throughout the week.

Wrapper Name Description Wrapper Link Date
Bullish ETF's ETF's trading in an uptrend, not overbought, actively-traded, price>$10. Excludes leveraged ETF's wrapper 12/02/16

ETF Technical Leaders

The following table represents ETF's that are in bullish trends and represent technically attractive reward-to-risk entry points (for example, we will shy away from adding an overbought ETF). Although these ETF selections have been pre-screened, investors are advised to pursue their own research to determine whether they are appropriate for their portfolios. Selections are time-sensitive and represent short-term swing trading opportunities that may or may not follow-through on a longer-term basis. In addition, selections may be voided once a market trend change has occurred based on the TrendFlex signals. Visit our FAQ's  for more suggestions regarding ETF Zone. Check back frequently as additional ETF's may be added to the week's list. 

Symbol Rationale Close Date Added
EWI iShares Italy ETF inexpensive and possible long-term bottom formed 22.13 12/02/16
XLY Retracement from recent gains; attractive entry point 81.44 12/02/16 
XLV  Post-election catch-up;  nearing positive moving avg. cross (50 over 200 day)  70.49 11/11/16 

 

Allocation Strategy is updated on a bi-weekly basis, and takes a longer-term view consistent with the TrendFlex Allegiance system. Allocations are based on a blend of macro-economic trends and technical analysis, and incorporate the insight of our Thought Leaders as expressed on the Baseline Analytics website, and our ETF Signals analysis.  Portfolio allocation corresponds to an investor profile of moderate risk and a 20-year investment horizon.  Updates to Asset Allocation may be issued more frequently depending on market conditions.

Asset Allocation Strategy - 12/16/2016   

Instrument 

Underweight

Neutral

Overweight

Equities            
Fixed Income            ♦       
Alternatives      ♦      
Cash          

Equities

Style

Large Caps      
   
Mid Caps          
Small Caps         ♦    

Sector

Staples           
Discretionary           
Technology          
Utilities    
     
Industrials          
Healthcare      
   
Materials        
Financials          
Energy      
   
Regions     
US          
Eurozone          
China    
     
India          
Japan          
Emerging Asia          
EMEA          
Latin America          

Fixed Income

Investment Grade          
High Yield          
Developed Market          
Emerging Market          
Treasuries          
TIPS          
Municipal          

Alternatives

Commodities          
Absolute Return        
REITS      
Convertible Bonds      
Continue reading
1173 Hits

TrendFlex Score & TrendFlex Signals for 12/09/2016

 

  Follow for TrendFlex Signal and Blog Update Alerts!

TrendFlex Credit Risk Premium Signals (CR)

TrendFlex Classic CR and Allegiance signals remains Long, as the major indices hit new highs.

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 11/08/16 +5.6% +5.6%
TrendFlex Allegiance CR Long 4/13/16 +11.9% +11.9%
Historic Performance        

 

TrendFlex Score

The TrendFlex Score decreased from 1.53 to 1.33 and remains below its three-week moving average.  It is resting at a level that in the past has preceded setbacks in equities.

TFS12092016 

TrendFlex Trend-Following Signals (TF)

The TrendFlex Classic TF and Allegiance signals remain in Uptrend.  Both have improved and once again achieved a "perfect" 1.0 score.   

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF  Cash 9/26/16 5.6% 5.6% 1.00
TrendFlex Allegiance TF Uptrend 5/31/16 7.6% 7.6% 1.00
Historic Performance          

 

Baseline Analytics Extremes

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. TED Spread
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow.

LQD Gap 120916

A large gap in the LQD/SPX ratio vs. its moving average gets larger, suggesting that the recent rally may need a breather. The VIX Put/Call indicator (below) has also moved to an extreme, pointing to an increased likelihood of a setback in equities.

VIX12092016

The Portfolio Strategies chart remains bullish. Hedges to long positions are in order given the extreme market readings and the low TrendFlex Score.  We would refrain from adding longs, waiting for a breather in the markets.      

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
699 Hits

Index & Sector ETF Signals - 12/09/16 Update

TrendFlex signals for the major index and sector SPDR ETF's below are based on a trend-following system filtered to identify the "risk" to a change in the trend. 

Major Index ETF's 

 Symbol  Trend

Trend Change Risk

Notes
 DIA Bullish Med Breakout to highs
 SPY  Bullish Med Breakout to highs 
 QQQ Bullish Low Finally catching up to the broader market
 IWM Bullish Low Strong breakout to highs; bullish for equities overall
 DBA Bearish Med Double bottom failure
 GLD Bearish Med Deeply oversold but technically weak; consider small long adds
 VGK Bullish Low Bounced from 40-45 support; crossed 50-day average
 UUP Bullish Low Clear uptrend but overbought
 TLT Bearish Hi Remains near major weekly support; oversold
EEM Bearish Med  Sharp selloff; bounce may be weakening

 Sector SPDR ETF's

 Symbol  Trend

Trend Change Risk

Notes
XLK Bullish Low  Attractive entry point following setback
XLU Neutral Hi

Oversold; at major support

XLI  Bullish Low Bullish breakout
XLB Bullish Low Bullish breakout 
XLV  Bullish Low Still an attractive entry point 
XLE Bullish Low Overbought
XLP  Neutral Hi Oversold; at major support;  look for recovery 
XLY Bullish Med Bounced as expected; now overbought
XLF  Bullish Med Overbought 

 

 

ETF Wrapper Reports

Baseline Analytics searchable Excel files representing the results of proprietary screeners applied to MetaStock software to identify technical patterns that suggest timely trading opportunities. Click on the wrapper   icon in the table below to download the Excel report, which includes instructions to find ideal setups.  Date represents data from that day's market close.  Visit frequently, as this table is updated throughout the week.

Wrapper Name Description Wrapper Link Date
Bullish ETF's ETF's trading in an uptrend, not overbought, actively-traded, price>$10. Excludes leveraged ETF's wrapper 12/02/16

ETF Technical Leaders

The following table represents ETF's that are in bullish trends and represent technically attractive reward-to-risk entry points (for example, we will shy away from adding an overbought ETF). Although these ETF selections have been pre-screened, investors are advised to pursue their own research to determine whether they are appropriate for their portfolios. Selections are time-sensitive and represent short-term swing trading opportunities that may or may not follow-through on a longer-term basis. In addition, selections may be voided once a market trend change has occurred based on the TrendFlex signals. Visit our FAQ's  for more suggestions regarding ETF Zone. Check back frequently as additional ETF's may be added to the week's list. 

Symbol Rationale Close Date Added
EWI iShares Italy ETF inexpensive and possible long-term bottom formed 22.13 12/02/16
XLY Retracement from recent gains; attractive entry point 81.44 12/02/16 
XLV  Post-election catch-up;  nearing positive moving avg. cross (50 over 200 day)  70.49 11/11/16 

 

Allocation Strategy is updated on a bi-weekly basis, and takes a longer-term view consistent with the TrendFlex Allegiance system. Allocations are based on a blend of macro-economic trends and technical analysis, and incorporate the insight of our Thought Leaders as expressed on the Baseline Analytics website, and our ETF Signals analysis.  Portfolio allocation corresponds to an investor profile of moderate risk and a 20-year investment horizon.  Updates to Asset Allocation may be issued more frequently depending on market conditions.

Asset Allocation Strategy - 12/02/2016   

Instrument 

Underweight

Neutral

Overweight

Equities            
Fixed Income            ♦       
Alternatives      ♦      
Cash          

Equities

Style

Large Caps      
   
Mid Caps          
Small Caps         ♦    

Sector

Staples           
Discretionary           
Technology          
Utilities    
     
Industrials          
Healthcare      
   
Materials      ♦     
Financials          
Energy      
   
Regions     
US          
Eurozone          
China    
     
India          
Japan          
Emerging Asia          
EMEA          
Latin America          

Fixed Income

Investment Grade          
High Yield          
Developed Market          
Emerging Market          
Treasuries          
TIPS          
Municipal          

Alternatives

Commodities          
Absolute Return        
REITS      
Convertible Bonds      
Continue reading
1223 Hits

Hedging Our Bets - 12/8/16 Midday Update

Overbought equities and extreme readings in several TrendFlex market trend indicator convinced us to add hedges to long positions. We will update the TrendFlex Score and charts this weekend.

Continue reading
906 Hits

New Month, New Dividends: Welcome December!

dvdsBaseline Analytics has refined a series of stock and ETF-screening algorithms that pinpoint timely, high-probability trades and investment opportunities.

The results of Baseline Analytics' stock and ETF screens are delivered in a downloadable Excel file.  This file can be sorted to identify various performance and technical criteria to help provide a further edge to your trading and investments. Instructions are provided to guide you through your review. Our goal is to deliver such opportunities at your fingertips, with minimal research and analysis needed on your end.  We do provide a link to Yahoo Finance for each of our timely picks should you want to delve further into particular equities or ETF's.

Baseline Analytics has published its list of the stocks going Ex-Dividend in December that exhibit favorable technical trends. Perhaps a dividend-payer or two will emerge as a timely, attractive investment. 

This list is offered free of charge.  Please check out our Premium Services , at a price of only $79 per year!

Click here for the list.

Subscribers to Baseline Analytics receive our proprietary screens regularly, and this screen in particular will be honed even further for more targeted opportunities, including noteworthy fundamental and technical criteria.  Receive these updates as well as our TrendFlex family of market trend signals and risk assessment tools as a subscriber to Baseline Analytics.

Profitable investing!

Baseline Analytics

Continue reading
1350 Hits

Extreme Reading Turning Neutral - Buying Opportunity?

We look for peaks and troughs in the CBOE VIX indicator versus its moving average (see chart below).  Peaks tend to coincide with short-term market lows, and troughs with market highs (measured by the S&P 500 index).  

Note how VIX hit a trough before the S&P 500 settled back from its recent high.  Since then, VIX has turned neutral (closing in on its moving average).  We read this as a bullish sign, as recent consolidation in the S&P 500 may present a less risky opportunity to add to longs.

VIX12022016 

 

 

Continue reading
1175 Hits

TrendFlex Score & TrendFlex Signals for 12/02/2016

 

  Follow for TrendFlex Signal and Blog Update Alerts!

TrendFlex Credit Risk Premium Signals (CR)

TrendFlex Classic CR and Allegiance signals remains  Long.  

TrendFlex Signal Trend  Date  Return

S&P 500  Return

S&P 500 timing signals based on credit risk (CR) premiums (corporate vs.Treasury debt). 
TrendFlex Classic CR Long 11/08/16 +2.4% +2.4%
TrendFlex Allegiance CR Long 4/13/16 +8.6% +8.6%
Historic Performance        

 

TrendFlex Score

The TrendFlex Score increased from 1.48 to 1.53, and remains bullishly below its three-week moving average.  

TFS12022016 

TrendFlex Trend-Following Signals (TF)

The TrendFlex Classic TF and Allegiance signals remain in Uptrend.  Both have weakened slightly from their "perfect" 1.0 scores from last week.   

TrendFlex Signal Trend  Date  Return

S&P 500  Return

Score

S&P 500 timing signals based on a weighted score of US Market technical indicators. Classic (short-term) and Allegiance (intermediate to long term).  Score:  Bullish = 1.0-1.75; Neutral = 1.75-2.25; Bearish = 2.25-3.0

TrendFlex Classic TF  Cash 9/26/16 2.4% 2.4% 1.30
TrendFlex Allegiance TF Uptrend 5/31/16 4.4% 4.4% 1.25
Historic Performance          

 

Baseline Analytics Extremes

Baseline Analytics Extremes highlights four key TrendFlex Indicators and their level of extreme readings.  The key indicators include the following:

  1. CBOE VIX and Put/Call Ratio
  2. TED Spread
  3. LQD vs. S&P 500 GAP reading

When one or more of these indicators has reached an extreme reading, chart and commentary will follow.

LQDGap1202016

A large gap in the LQD/SPX ratio vs. its moving average suggests that the recent rally may need a breather.  Thegap was a max before this week's modest setback. The VIX Put/Call Extreme has shifted from extreme (pointing to the resulting setback in equities) to neutral, following this week's consolidation of recent gains.

The Portfolio Strategies chart remains bullish, especially with regards to recent market strength and positive seasonality.      

Portfolio Strategies*
Reduce Longs
 Sell Calls
 Hedge Longs
Set Stops on Longs
Short Overbought Equities
 Add to Longs
Sell Puts
Hedge or Reduce Shorts
 Long Futures and Options

 *Red highlighted items are recommended strategies

 

Continue reading
633 Hits

Index & Sector ETF Signals - 12/02/16 Update

TrendFlex signals for the major index and sector SPDR ETF's below are based on a trend-following system filtered to identify the "risk" to a change in the trend. 

Major Index ETF's 

 Symbol  Trend

Trend Change Risk

Notes
 DIA Bullish Med Strong breakout to highs
 SPY  Bullish Med Breakout to highs 
 QQQ Bullish Low Flat trading range; oversold, long opportunity
 IWM Bullish Low Strong breakout to highs; bullish for equities overall
 DBA Bearish Med Double bottom failure
 GLD Bearish Med Deeply oversold but technically weak; consider small long adds
 VGK Neutral Hi Meandering near 44-45 support; looking for shift to upside
 UUP Bullish Low Clear uptrend but overbought
 TLT Bearish Hi Near major weekly support; positive divergence forming; contrarian buy?
EEM Bearish Med  Sharp selloff; avoid for now; nearing oversold

 Sector SPDR ETF's

 Symbol  Trend

Trend Change Risk

Notes
XLK Bullish Low  Attractive entry point following setback
XLU Neutral Hi Oversold; look for recovery
XLI  Bullish Low Bullish breakout
XLB Bullish Low Bullish breakout 
XLV  Bullish Low Still an attractive entry point 
XLE Bullish Low Firm uptrend
XLP  Neutral Hi Oversold; look for recovery 
XLY Bullish Low Modest pullback; attractive entry 
XLF  Bullish Med Overbought 

 

 

ETF Wrapper Reports

Baseline Analytics searchable Excel files representing the results of proprietary screeners applied to MetaStock software to identify technical patterns that suggest timely trading opportunities. Click on the wrapper   icon in the table below to download the Excel report, which includes instructions to find ideal setups.  Date represents data from that day's market close.  Visit frequently, as this table is updated throughout the week.

Wrapper Name Description Wrapper Link Date
Bullish ETF's ETF's trading in an uptrend, not overbought, actively-traded, price>$10. Excludes leveraged ETF's wrapper 12/02/16

ETF Technical Leaders

The following table represents ETF's that are in bullish trends and represent technically attractive reward-to-risk entry points (for example, we will shy away from adding an overbought ETF). Although these ETF selections have been pre-screened, investors are advised to pursue their own research to determine whether they are appropriate for their portfolios. Selections are time-sensitive and represent short-term swing trading opportunities that may or may not follow-through on a longer-term basis. In addition, selections may be voided once a market trend change has occurred based on the TrendFlex signals. Visit our FAQ's  for more suggestions regarding ETF Zone. Check back frequently as additional ETF's may be added to the week's list. 

Symbol Rationale Close Date Added
EWI iShares Italy ETF inexpensive and possible long-term bottom formed 22.13 12/02/16
XLY Retracement from recent gains; attractive entry point 81.44 12/02/16 
XLV  Post-election catch-up;  nearing positive moving avg. cross (50 over 200 day)  70.49 11/11/16 

 

Allocation Strategy is updated on a bi-weekly basis, and takes a longer-term view consistent with the TrendFlex Allegiance system. Allocations are based on a blend of macro-economic trends and technical analysis, and incorporate the insight of our Thought Leaders as expressed on the Baseline Analytics website, and our ETF Signals analysis.  Portfolio allocation corresponds to an investor profile of moderate risk and a 20-year investment horizon.  Updates to Asset Allocation may be issued more frequently depending on market conditions.

Asset Allocation Strategy - 12/02/2016   

Instrument 

Underweight

Neutral

Overweight

Equities            
Fixed Income            ♦       
Alternatives      ♦      
Cash          

Equities

Style

Large Caps      
   
Mid Caps          
Small Caps         ♦    

Sector

Staples           
Discretionary           
Technology          
Utilities    
     
Industrials          
Healthcare      
   
Materials      ♦     
Financials          
Energy      
   
Regions     
US          
Eurozone          
China    
     
India          
Japan          
Emerging Asia          
EMEA          
Latin America          

Fixed Income

Investment Grade          
High Yield          
Developed Market          
Emerging Market          
Treasuries          
TIPS          
Municipal          

Alternatives

Commodities          
Absolute Return        
REITS      
Convertible Bonds      
Continue reading
1165 Hits

Dow Theory Bullish

Can't ignore the positive correlation of the Dow Jones Industrial Averages and the Dow Transportation Index.  Transports not far from hitting a new high to join the Industrials.  A bullish trend.  Watch out for extremes however (in sentiment and momentum indicators).  Our new TrendFlex Extremes readings are updated regularly as they develop.

 

DT112916

Continue reading
1323 Hits