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Registered User
Joined: 12/2/2004
Posts: 1,775
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One simple way to look for a recent trend change in a sector is to open Morningtar Industry Groups and sort by Price Percent Change past 5 days and/or past 30 days. Then select sub-industry components to find potential setups on individual stocks. A few days ago I found POT that way, liked the chart setup, but watched like a dummy as price trucked on up out of resistance last week. Suggestions and comments appreciated.
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Registered User
Joined: 7/1/2008
Posts: 889
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I have created a watchgroup of all sector / industry ETFs. I also have a chart template that has a relative strength indicator vs. the S&P500 in one pane.
I decide over which time period I am looking for relative strength, and then run a sort based on visual value or visual change of the relative strength indicator.
I do the same thing with a watchlist of all country ETFs, and I have a template that has a relative strength indicator vs. VT (the all country world index ETF). This tells me which regions of the world are hottest.
Finally, I have a watchlist of all commodity ETFs, along with a template with a relative strength indicator vs. the DJAIG commodity index.
This gives me the ability to slice up every sector, region, or commodity versus the benchmark and observe what's hot. If the trend is not too mature, I know I should be focused in that area. if the move is extended, then I know to be cautious about reversals.
I also use moving averages based on the relative strength indicator itself. I find its helpful in filtering out some of the noise, and also have found the RS indicator to often behave like price does near its moving averages.
If I wanted to play advanced market-neutral strategies I might look for ETFs with RS bouncing off a moving average trending up, and go long, while looking to short sector ETFs that have a RS bouncing off a downward trending MA. (or go long the inverse) this is where one has to be mindful of the age of the trend, because a nice bbout of sector rotation can have a market neutral strategy like this twisting in the wind.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Great stuff Ben, thanks for spelling out. You definitely have fine tuned it much, much more than I have.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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You guys may be interested in this:
Thanks
diceman
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Interesting indeed, thanks diceman. Amazing what Telechart is capable of, always something new worth learning. I have often used the standard comparison option listed in the toolbar under chart template, but did not know I could customize the date period as shown in first video with those bars showing time period, very neat feature....will check em all out.
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