On the Radar for Tomorrow

I have several spread sheets that are part of my nightly homework. The majority of the spreadsheets are automated (meaning that I just have to download current data and formula's fill in the rest) and some bits of them require some manual work. I bring this up because I think that going through this same exercise every night helps me stay in tune with the market and it gives me ideas of what to keep an eye on for the following trading day.

Here are a couple of snippets from one of my spread sheets that shows the 2 strongest sector/asset classes for today and the bottom 4 sector/asset classes. As you can see, Financials and Materials were today's leaders and Gold, Crude Oil, 20 Yr. Bonds, and Silver were the big losers. These will be the first things that I watch as tomorrow's trading unfolds and I'll be looking for continuation in these sectors. As for the spread sheet, it is broken up into two sections:

• Relative Strength--this ranks the sectors and asset classes by the performance vs. the S&P 500 (this is the same relative strength sheet that I used to post weekly on the blog) putting the most weight on today's price action but also incorporating price day's returns.
  
• Market Thermometer--loosely based on Alexander Elder's indicator with the same name, this indicator rates a stock's ability to trade at higher/lower levels...this helps with the relative strength rating because sometimes you can have a high or low relative strength rating in a stock but the stock is merely trading in the middle of a range. The thermo. is not anything super fancy, it just gauges the day's price action versus recent high/lows and the 52 wk high and low.

There you have it, a lot of words to really just say watch financials (especially JPM) and materials (DOW) and look to short silver, gold (GG, IAG) and bonds (TBT).

Hope everyone's having a great trading week so far.

TLT