Financial Industry Bull Indicator

The financial industry model has given a bull indication.  For finance I track with the leveraged ETF FAS.

So Friday morning at the opening I will buy (with paper money) FAS.

This goes against most TAs' expectations; they called or are calling for a market top at the present time and they're expecting a downturn.   This could get interesting.


-----------B U L L    I N D I C A T O R S--------------
            Finance, based on FAS. 
            Small Caps based on TNA.
            Biotechnology, represented by  BIB 

----------- Remaining   B E A R S--------------

            Small Caps based on SAA.
            Energy, based on ERX.             
            Real Estate, based on DRN.
            SP 500, based on SPXL. 
            Technology, based on TECL .
            Basic Materials, based on MATL.
            Retail, based on RETL.

Small Cap and Biotech Bulls?

Where did they come from??? This afternoon, after the close, I ran the models and two bull indicators popped up.  This is surprising to me because I really think that we are presently at a market top.

Be that as it may;  tomorrow at the opening I will buy (with paper money) the 2 leveraged associated ETFs.

 
-----------B U L L    I N D I C A T O R S--------------
            Small Caps based on TNA.
            Biotechnology, represented by  BIB 

----------- Remaining   B E A R S--------------

            Small Caps based on SAA.
            Finance, based on FAS. 
            Energy, based on ERX.  
            Real Estate, based on DRN.
            SP 500, based on SPXL. 
            Technology, based on TECL .
            Basic Materials, based on MATL.
            Retail, based on RETL.

No Bull Indicators Left

Using today's 3PM numbers and treating them like closing #s,  the sole bull indicator (for  Financials based on FAS. ) threw a bear indication.  So now all groups have bear flags flying.   So in my paper trading I will sell FAS at or near today's closing price.

I am now convinced that my model (aggregating and averaging  Momentum #s for a select group of stocks in conjunction with the price movement of a 3x leverage ETF) is similar to an overbought/oversold indicator... such as the relative strength indicator for an individual stock.

I also follow:

• Small Caps based on SAA.
  
• Energy, based on ERX.  
  
• Real Estate, based on DRN.  
  
• Small Caps based on TNA.
  
• SP 500, based on SPXL. 
  
• Biotechnology, based on  BIB 
  
• Technology, based on TECL .
  
• Basic Materials, based on MATL.
  
• Retail, based on RETL.

Only One Bullish Indicator

After running the program using the overnight numbers only one bullish indicator is presented and that is for Financials based on FAS. 

----------- Remaining   B E A R S--------------

            Small Caps based on SAA.
            Energy, based on ERX.              Real Estate, based on DRN.  
            Small Caps based on TNA.
            SP 500, based on SPXL. 
            Biotechnology, represented by  BIB 
             Technology, based on TECL .            Basic Materials, based on MATL.
             Retail, based on RETL.

7 Out of 10 Indicators Bullish

This afternoon, assuming that the 3pm prices are similar to the closing price, 7 of the models gave a bull indicator.         
 
-----------B U L L    I N D I C A T O R S--------------
            Small Caps based on SAA.
            Finance, based on FAS. 
            Energy, based on ERX.  
            Real Estate, based on DRN.  
            Small Caps based on TNA.
            SP 500, based on SPXL. 
            Biotechnology, represented by  BIB 

----------- Remaining   B E A R S--------------

             Technology, based on TECL .
            Basic Materials, based on MATL.
             Retail, based on RETL.

Dropping 2 Year Model

I'm dropping the past two year model - there's an old saying "a man with two watches never knows the correct time."

Also, using only one model makes it easier to maintain the blog.

Where The Model Presently Stands

Symbol	Previous Call	Date	Current Call	Date
tecl	Bull	2012-11-08	Bear	2012-11-19
saa	Bull	2012-12-14	Bear	2012-12-31
matl	Bull	2012-11-09	Bear	2012-11-13
fas	Bull	2012-12-04	Bear	2013-01-02
erx	Bull	2012-11-08	Bear	2012-11-19
retl	Bull	2012-11-09	Bear	2012-11-19
drn	Bull	2012-12-21	Bear	2013-01-02
tna	Bull	2012-12-21	Bear	2012-12-31
spxl	Bull	2012-12-14	Bear	2012-12-18
bib	Bull	2012-12-03	Bear	2012-12-18

Almost Completely Bearish

With the exception of the Past 2 Year Model for the Biotechnology, represented by  BIB, all of the models are in a bearish mood.    This is due to the fact that the models throw a bear/sell indicator when the aggregate momentum of the stocks in the model go above a  specified threshold (over bought condition) and with today's big gap up in almost all stocks this threshold has be surpassed.

Please remember that this indicator is a short term timer, generally one to three weeks.


-----------B U L L    I N D I C A T O R S--------------
Single model bull is
            Biotechnology, represented by  BIB (past 2 year model).
            
-----------B E A R    I N D I C A T O R S--------------

 For both models the rest remain bearish:
            Technology, based on TECL .
            Small Caps based on SAA.
            Basic Materials, based on MATL.
            Finance, based on FAS. (past year model as of today)
            Energy, based on ERX. (past year model as of today)
            Retail, based on RETL.
            Real Estate, based on DRN.  (past year model as of today)
            Small Caps based on TNA.
            SP 500, based on SPXL. (both models as of today)

Single model bears are
            Biotechnology, represented by  BIB (past year model).
            
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Starting in 2013 I will paper trade the 1 year model.   See the "What If" page for transactions.