Quick Glance at the World

Here's a screen shot from a spread sheet that I've started keeping up with. It ranks 25 Country ETF's based on Relative Strength and then it also has a temperature score for each county (Temp. scores are based on a stocks ability to make higher highs and higher lows combined with where it's trading relative to its 52 week highs and lows). A couple things to note, Russia is the strongest today and it clocked in an impressive 91 temp. score...that's cookin! What I think is really interesting on this sheet is how all of the Asian countries are at the bottom...concerns over China maybe?..I don't know. I'll have to keep an eye on this.

I just started this spread sheet last weekend and am looking forward to watching the macro view of the world stock markets and seeing how this sheet helps keep me abreast of the global picture. I'll post an update on it soon.

Hope everyone's having a good week.

TLT

A Couple Things To Keep An Eye On

Here's a quick look at some of the good performers from today...maybe this will give us an idea of what to look at for potential trades for tomorrow and possibly the rest of the week. To begin with, here are the 3 ETFs with the highest Relative Strength Scores (a proprietary measure that weights recent price action to the S&P 500) with their corresponding Thermometer Temperatures (proprietary score that measures a stock/etf's ability to register higher highs and higher lows):As you can see, Semiconductors led the pack today (#1 out of 30), with Consumer Discretionary not far behind (#3 out of 30). Lets take a closer look at the Semiconductors. Here's the Market Thermometer Temperatures for the three individual stocks that I follow in that sector:Not surprising that they are very strong. So far we have established that the Semis were strong today, but how have they been trading lately. For that I look at what I call the cumulative temperature score. This takes the past 5 day's trading action and comes up with 2 scores: an average and a total. Here's where they stand: Out of the 30 stocks in 10 sectors that I track daily, only 9 of them managed to have thermometer scores above their 5 day average today...and all three of the semiconductor stocks turned out to be part of those 9 stocks. Furthermore, the 5 day totals are in the top 25% rank of the 30 stocks, this shows that the stocks have been bullish for several days, not just one. These are both very bullish signs.

So what does all this mean? It means to watch the semiconductors! I track and trade (in my personal account) these three (INTC, TXN, AMAT) and I also watch and trade (for the firm account) SNDK. I'll be looking for long trades in these as long as SMH continues to show strength.

What else is looking interesting right now? The quick answer is GE...and maybe industrials in general. To begin with, GE has a phenomenal Temperature score today..see below: Also, there was some interesting volume in the industrials today..GE included. Only 1/3 of the stocks that I track (10 out of 30) traded volume today that was above their 20 day average volume and all three industrials were in this group. This alone makes them worth watching...at least worth keeping an eye on GE for a potential day or swing trade.

This is the type of analysis that I do on a daily basis. I've admitted that I love spreadsheets and this is how I use them. Going through these exercises on a daily basis helps me keep on top of market action and it gives me trading ideas.

That's all I've got for now..hope everyone's having a great week so far.

TLT

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

Where's the Alpha?

Here's a screen shot of half of a relative strength spread sheet that I keep up with:This spread sheet follows 30 different etfs and index funds that range from various market indexes (qqqq, iwm, oex, etc.), sectors (xlp, xlk, xli, etc.) and other asset classes (bonds, gold, copper, foreign stocks). It automatically updates itself every day and it helps me keep up with where the alpha's at.

The relative strength rating is a basic formula that tracks the daily return and compares it to the return of the S&P to generate a basic relative strength rating. I take this relative strength rating from the current day and then combine it with the prior day's reading and weight the current days relative strength higher in the computation...thus putting more weight on today's price action but still taking into account yesterdays, which in turn takes into account the prior days rating. This method of calculating smooths out the relative strength ratings but yet still provides quick enough signals to help see where the order flow is heading on a macro level in the short run.

On a different note, sadly, I lost my trial today. It's one of those things that happens but it always stings. There's always one side that has to lose in a trial and today was our turn. Enough of that though. I'll be back tomorrow.

TLT