ETF HQ – Little Cause For Concern So Far

February 28, 2011 – 08:35 am EST

Another week comes to an end and it was an exciting one for all the wrong reasons.  The stock market saw some sharp declines but even more alarmingly the New Zealand Town of Christchurch suffered a devastating earthquake.  Thanks to everyone who emailed to ask if we were OK – Luckily for us the quake was down the other end of the country.

The death toll currently sits at 148 but is expected to rise significantly as more bodies are found.  Even these amazing photos just don’t do justice to the scale of the devastation.  Please take the time to read this article to get a true understanding of what it was like – The Day The Earth Roared, and then go here to help us Kiwis out – http://www.redcross.org.nz/donate.  Thank you so much!

To the markets – On Tuesday we saw sharp declines that apparently come out of nowhere, however this is typical behavior from a mature rally.  Thankfully support was quickly found and Friday saw many buyers return.  The skill at times like this is in being able to separate the whipsaws from the reversals, lets take a closer look…

** New Post – The Variable Moving Average (VMA) aka Volatility Index Dynamic Ave (VIDYA)

**** Welcome to all our new readers this week.  We grow by word of mouth so thanks for spreading the word!

.

ETF % Change Comparison

.

ETF % Change Comparison

Closest to their highs and also the best performers over the last week were IWM and SMH.  These are two highly economically sensitive ETFs – If we had just seen a major market reversal then it is most unlikely that these two would be showing such strong relative strength.  However the under performance of the Transports (IYT) is not good and it will be important that they don’t get left behind.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

A bit of selling is healthy and for now there are no warning signs from SPY.

.

QQQQ

QQQQs 50 Day SMA support held strong, keep an eye on this level.

.

SMH

Volume from the Semis is lacking but the price action still looks strong.

.

IWM

Great volume from the Small Caps (IWM) – we remain in a bull market while that trend is intact.

.

IYT

IYT must hold together if the rally on the broad market is to continue.  Look out below $90.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

The transports have achieved the first sell signal in almost 6 months.  Bear alerts across the board warn that the weekly cycle is slowing.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow & NasDow

NasDow – The Dow has been dominant over the NASDAQ for 77 days now.  During this time the Dow has advanced 6.31% and the NASDAQ has advanced 5.44%.

TransDow – The Dow has been dominant over the Transports for 34 days.  During this time the Dow has advanced 2.18% and the Transports have advanced 0.29%.

Historically when the Dow has been the dominant index the market has been very unproductive.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

LTMF 80 continues to hold a position in QQQQ after 161 days and currently shows a profit of 20.35%.

The Liquid Q trade has gotten off to a bad start and currently shows a loss of 1.84% after 7 days.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

We have seen a little bit of light selling and a number of support levels have been tested but there is little cause for concern so far.  The strongest bearish arguments comes from the lack luster performance of IYT and the lack of volume behind SMH.  However IWM and SMH continue to show relative strength and their volume trends do remain bullish.

If IYT closes below $90 and its 100 Day SMA then expect more selling from the broad market.  Keep an eye on the 50 Day SMAs – they have generated buying interest so far and will hopefully continue to do so.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Cheers

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Quote of the Day:

“Do not regret growing older.  It is a privilege denied to many.”  – Author Unknown

ETF HQ – Same Old Bull

February 21, 2011 – 04:03 am EST

It was more of the same from this relentless bull over the last week.  Volume flows into most areas confirmed the price action and the Transports have now spent a few days above resistance at $95; all positive signs.  There are a few areas that will need to be monitored for warnings of profit taking though, lets take a closer look…

** If you have a moment, please vote for Whitney in the Demon Bikini Model Search 2011.

**** The LTMF 80 system that comes free with this newsletter is showing a profit of 22.61% on its current trade.  The two previous trades produced a return of -1.26% and 12.55%.  We grow by word of mouth… please and thank you for continuing to tell your friends.

.

ETF % Change Comparison

.

ETF % Change Comparison

The Semis (SMH), Small Caps (IWM) and Transports (IYT) were the market leaders over the last week.  These are all highly economically sensitive so this shows confidence in the bull.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

SPY is at a new highs on strong volume, it is difficult to pick holes in that.

.

QQQQ

All looking good from QQQQ, just keep an eye on the volume trend for signs of weakness.

.

SMH

If SMH sees a trend change in volume and QQQQ does the same then expect profit taking to follow.

.

IWM

Wow great volume into IWM, awesome to see.

.

IYT

It would be good to see IYT at least hold onto $95 and have OBV stay above its previous high.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

The buy signals remain active across the board and the bull alerts offer no warnings at this time.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow and NasDow

The Dow remains dominant over both the Transports and the NASDAQ.  Historically the market has been very unproductive under these conditions.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

The LTMF 80 continues to hold a position in QQQQ that is now showing a profit of 22.61%.

Liquid Q has just opened a new position in QQQQ.  This new trade has a 66% probability of being profitable with an average profit of 7.36%

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

While there are not currently any signs of weakness, keep a close eye on the volume flows of QQQQ and SMH.  It is positive that Liquid Q has just opened a new long position in QQQQ; this has a 2/3 chance of being profitable.  If IYT closes back below $95 then the market is unlikely to make much headway so lets hope the Transports keep trucking.  Make it a great week!

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Cheers

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Quote of the Day:

“Hope is not a strategy.  Luck is not a factor.  Fear is not an option.” – James Cameron

ETF HQ Report – Momentum

February 14, 2011 – 08:26 am EST

Happy Valentines day to you!  We very much appreciate all those who read this newsletter.  Also valentines day has a significant impact on many areas so here is an in-depth report – Valentines Day by the Numbers.

On a more serious note; much respect to the courageous people of Egypt!  We have just witnessed true power of the people in action!  Lets hope that it brings lasting change, peace and prosperity to their nation.

Inside the bat cave at headquarters, we are currently chest deep drowning in numbers from tests as part of the Technical Indicator Fight for Supremacy.  The next round of results will be posted soon but in the mean time here is one of the indicators that we are currently putting through its paces – Fractal Dimension.

To the markets…

Last week we spoke of the importance of continued momentum, that we needed to see a new high from IWM and that ITY must hold onto support at $90.  Well this market certainly knows how to deliver and even produced some big gains from IYT.  Lets take a closer look…

****There is currently a 22% profit on the open trade from the LTMF 80 system that comes free with this newsletter.  We grow by word of mouth so thanks for continuing to spread the word.

.

ETF % Change Comparison

.

ETF % Change Comparison

It is not often that you see new highs across the board like this and it is a very positive sign.  IYT and IWM have been lagging behind recently but over the last week lead the market higher.  SMH on the other hand was at the back of the pack, but after several weeks of big gains this is not surprising.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

Volume on SPY is the best part of this picture.

.

QQQQ

QQQQ will not behave like this forever and we are privileged to be part of this epic rally.

.

SMH

Volume flows on SMH are not super strong and will need close monitoring for warnings of weakness.

.

IWM

IWM has produced the new high we were looking for and it has been confirmed by OBV.

.

IYT

It would be great to see IYT close at a more convincing new high backed by volume.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

The buy signals remain active across the board and have been active for almost 6 months now.  Bull alerts have returned to IWM and IYT.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow & NasDow

The NasDow has indicated that the Dow has been dominant over the NASDAQ and likely to outperform for the last 63 days.  During this time the Dow and NASDAQ have advanced 7.56% and 6.52% respectively.

The TransDow has indicated that the Dow has been dominant over the Transports and likely to outperform for the last 20 days.  During this time the Dow and the Transports have advanced 3.38% and 3.76% respectively.

Historically when the Dow has been dominant the market has been highly unproductive.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

The LTMF 80 continues to hold a position in QQQQ and is now showing a profit of 22% after 147 days.  Liquid Q remains in cash.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

No markets don’t only go up and yes we are likely to get caught out by sudden and sharp profit taking at some point.  At the moment however there are very few signs of weakness and there are always warning signs before things turn really bad.  SMH has far weaker volume than is ideal so its behavior should be watched closely.  Hopefully we will soon see a more convincing close at a new high from IYT as this would be a further sign of bullishness.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Cheers

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Quote of the Day:

“I will not leave the square.  Over my dead body.  I trust the army, but I don’t trust those controlling the army behind the scenes.  Down with corruption and repression.  This is a new day of freedom.  I have tasted freedom and I will not turn back.” – Mohamed Salah 27, Agriculture Graduate

ETF HQ Report – Sterodic Rally Continues

February 07, 2011 – 04:20 am EST

I hope everyone enjoyed the Super Bowl and congratulations to the Packers.  I enjoyed everything but the Black Eyed Peas performance which was worse than a violin being played badly.

To the markets, the sterodic rally continued over the last week with most areas up over 2%.  Few support levels even had the chance to be tested apart from IWM’s 50 day simple moving average and it held strong.  SPY quickly made its way above $130, a resistance level that I had expected to stand for a few weeks.  One of the bests parts however was that volume was strongly behind the bulls, lets take a closer look…

***We grow by word of mouth so thanks for continuing to spread the word.

.

ETF % Change Comparison

.

ETF % Change Comparison

New highs from all but IWM and IYT are great to see but most importantly SMH continues to lead.  Being so economically sensitive SMH acts like the canary in a coal mine and for the time being it says that everything is just fine.  The Transports (IYT) are also important however and it is important that they do not lag too behind far if the rally is to be sustained.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

Resistance on SPY at $130 has been broken and volume is strongly with the bulls.

.

QQQQ

With OBV at a new high it is a great sign for QQQQ.

.

SMH

SMH has been fueling this rally and has had a recent surge of volume; all positive signs.

.

IWM

We really want to see IWM at a new high sooner rather than later.  Below the 50 day SMA would be dangerous.

.

IYT

IYT offers the strongest bearish argument at the moment; a close below $90 would be bad news.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

All buy signals remain active and bull alerts have returned for most of the ETFs.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow NasDow

The Dow remains dominant over the NASDAQ and the Transports.  Historically the market has made very little ground under these conditions.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

The LTMF 80 continues to hold a position in QQQQ that is now showing a profit of almost 20%.  Liquid Q remains in cash.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

With strong volume backing the latest leg of this rally and SMH leading the way higher there are many reasons to be confident.  However it would have been nice to see a little more profit taking as such profit taking is necessary in a healthy market.

What we really need now is continued momentum.  That involves IWM moving to a new high and IYT at least holding onto support.  Be on high alert if IWM closes below its 50 day SMA and IYT closes below $90; with a loss of these levels sharp and broad based profit taking is likely.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Cheers

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Quote of the Day:

Challenge is the core and the mainspring of all human activity.  If there’s an ocean, we cross it; if there’s a disease, we cure it; if there’s a wrong, we right it; if there’s a record, we break it; and finally, if there’s a mountain, we climb it. – James Ramesy Ullman

ETF HQ Report – A change from the typical

January 31, 2011 – 04:17 am EST

The march higher continued for the first part of last week and it looked as though the concerns that were raised in our last newsletter were unfounded.  Then on Friday the market took a big hit that saw QQQQ down over 2.5% on the day and end flat for the week.  This is a change from the typical action over the last 5 months but not all was bad, let take a closer look…

***We grow by word of mouth, if you like this newsletter then please share it.

.

ETF % Change Comparison

.

ETF % Change Comparison

The main thing you will notice from the numbers above is that SMH managed to advance 2.05% and is 2.08% off its high while QQQQ advanced 0.09% and is 2.54% off its high.  It is very impressive when SMH can show relative strength like this and if it continues then any profit taking can be considered a buying opportunity.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

SPY has strong resistance at $130, still expecting a test of the 50 day SMA.

.

QQQQ

It would be good to see a test of $54, keep an eye on SMH for relative performance.

.

SMH

A little more selling from SMH will cause a trend change in volume and a likely test of the 50 Day SMA.

.

IWM

Key support at test here on IWM, keep an eye on the 50 day SMA.

.

IYT

The Transports have weak volume and have broken through support, not a safe place to be.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

The buy signals remain active after more than 5 months but the ‘bear alerts’ warn that the weekly cycle continues to slow.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow & NasDow

The Dow remains dominant over both the NASDAQ and the Transports and both systems remain in cash.  Historically the market has been very unproductive while the Dow was been dominant.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

LTMF 80 continues to hold an open position in QQQQ and is currently showing a profit of 16.35%.  Liquid Q remains in cash.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

Volume flows over the last week favored the bulls as nearly all the selling occurred on just one day (Friday).  SMH also displayed some great strength in the face of that selling which is another positive sign.  Plus, with the exception of IYT, there have not yet been any major support levels lost.  This would suggest that what we are seeing is a bit if healthy profit taking but I will be monitoring the situation closely for any more sinister signs.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Cheers

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Quote of the Day:

“What are the differences between Mark Zuckerberg and me?  Let’s take a look.  I give you private information about corporations for free and I’m a villain.  Mark Zuckerberg gives your private information to corporations for money and he’s Man of the Year.” – Bill Hader’s Julian Assange

ETF HQ Report – A number of excuses to sell

January 24, 2011 – 04:32 am EST

It has been a while since we last saw declines as sudden and sharp as they were over the last week.  But this is to be expected from a heavily overbought market and why we warned it was a dangerous time to initiate bullish positions.  A rather interesting divergence between the small caps and the big caps occurred during the selling and could be an indication that the smart money is retreating to safety, lets take a closer look…

***Thanks for continuing to spread the word about this newsletter.

.

ETF % Change Comparison

.

ETF Percent Change Comparison

Above you can see that IWM slashed over 4% off its price while DIA managed to advance 0.77% and finished the week at a new high.  As the market risk increases a shift in performance tends to occur as the smart money moves out of the more economically sensitive areas like the small caps and semiconductors.  You will notice however that SMH held together relatively well which is a good sign.  If SMH can continue to maintain its strength this week then any profit taking is likely to be short lived.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

Both the RSI and volume flows have turned bearish on SPY, $130 is likely to stand as resistance.

.

QQQQ

It would be healthy for QQQQ to test $54 or its 50 day SMA but below these levels things get more dangerous.

.

SMH

SMH is very close to turning bearish.

.

IWM

I will be keeping a close eye on IWM this week to see if the 50 day SMA will hold.

.

IYT

IYT is looking weak and we have taken our profits.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

IWM and IYT recieved several weeks of bear alerts indicating internal weakens before being the big losers last week.  Still the buy signals remain active after over 20 weeks.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow & NasDow

The TransDow locked in a profit of 9.01% after 105 days but has now moved into cash.  The Dow is now dominant over both the Transports and the NASDAQ, historically under these conditions the market has been extremely unproductive.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

LTMF 80 continues to hold a position in QQQQ with a current profit of 16.24%.  Liquid Q remains in cash.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

A number of excuses to sell have developed over the last week with bearish volume flows and RSI from SPY, IWM and IYT.  SMH is on the verge of turning bearish while the TransDow has moved to cash after locking in a 9% profit on the transports.  What we are yet to see however is the loss of any major support.  Keep an eye on the 50 day moving averages across the board and how SMH behaves.  The semis held together comparatively well over the last week and if they can continue to do so then any declines are likely to be short lived.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Cheers

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Quote of the Day:

“A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual doom.” – Martin Luther King, Jr.

ETF HQ Report – Broken Out

January 17, 2011 – 06:35 am EST

In our last newsletter we spoke of an imminent breakout stating that “A close by QQQQ above $55 and IYT above $93 would be very bullish and likely mark the start of another leg to this rally.”  Both of these resistance levels were broken that Monday and the market has strongly rallied ever since.  Lets take a closer look…

**Please excuse the absence of a newsletter last week, it is summer here in New Zealand and I had an unexpected extension to my holiday.  Also welcome to our new readers!  We grow by word of mouth so thanks for spreading the word.

.

ETF % Change Comparison

.

ETF % Change Comparison

New highs almost across the board are a great sign.  Also you can see that SMH is back leading the market, this gives further validity to the recent leg of the rally.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

Volume is still not as strong as it should be but the price action from SPY remains strong.

.

QQQQ

The close by QQQQ above $55 saw the start of the breakout and has been backed by strong volume.

.

SMH

SMH is hugely overbought but its fantastic to see the Semis charging ahead so strongly.

.

IWM

IWM needs to see OBV moving higher to confirm the price action.

.

IYT

With weak volume and sluggish price action, IYT is unlikely to be a market leader.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

Strong Buy signals remain active after 20 weeks.  I can’t recall a time in the last 5 years that they have lasted so long.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow & NasDow

The Transports remain dominant over the Dow which is a positive sign and the TransDow position in DJT remains active.  The NasDow remains in cash.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 and Liquid Q

The LTMF 80 is showing a profit of 19% and the position on QQQQ remains open.  Liquid Q is still in cash.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

It is great fun when the market can do no wrong like this but don’t lose sight of the risks.  The danger comes to those who have been sitting on their hands and realize that they have missed out on an epic rally.  The rest of us are sitting on healthy profits but now is not the time to be jumping on the band wagon as the risks of a sudden pull back are very real.  For now however, let the good times roll.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Cheers

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Quote of the Day:

“The clock is running.  Make the most of today.  Time waits for no man.  Yesterday is history.  Tomorrow is a mystery.  Today is a gift.  That’s why it is called the present.” – Unknown

ETF HQ Report – Breakout Imminent

January 03, 2011 – 05:45 am EST

Welcome to twenty eleven and thanks for joining us for the ride.  I know I have really enjoyed connecting with many of you over the last year and hope that you all get value from the ideas that we share.  There is a heap of research to get through and I hope to put more time into ETF HQ this year.  Let us know if there are any particular areas that you would like us to focus on.

To the markets – it was yet another uneventful week that basically finished where it started.  However periods of consolidation are nearly always followed by sudden breakouts and such a breakout now appears imminent.

.

*****Happy New Year!!  Thanks for keeping this service growing my spreading the word.

.

ETF % Change Comparison

.

ETF % Change Comparison

It is positive to see the transports (IYT) closing the week at a new high but the market has been mostly flat as you can see.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

SPY made no ground over the last week but volume flows continue to improve.

.

QQQQ

Support from the Nov high and resistance at $55, expect a breakout very soon.

.

SMH

A close below $32 would weigh heavily on the broad market.

.

IWM

No indications of a rally over the short term from IWM.

.

IYT

Volume on IYT is improving, the stop at $93 is likely to be hit this week if this trade fails.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

Buy signals remain active across the board while the ‘Bear Alerts’ continue to show that the weekly cycle is weakening.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow & NasDow

The Transports remain dominant over the Dow and the TransDow trade is showing a profit of 10.34% after 84 days.  The NasDow remains in cash as the Dow remains dominant over the NASDAQ.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

The LTMF 80 continues to hold a position in QQQQ that is currently showing a profit of 13.70%.  Liquid Q remains in cash.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

The consolidation over the last month has been within a tight range that has created support underfoot and resistance overhead.  There appears to be little indication that the breakout will be bullish but we are also lacking many sell signals at this point.  A close by QQQQ above $55 and IYT above $93 would be very bullish and likely mark the start of another leg to this rally.  Until then the risk remains to the downside.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Cheers

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Quote of the Day:

“Millions saw the apple fall, but Newton was the one who asked why.” – Bernard M. Baruch

ETF HQ Report – ‘Twas the week before Christmas

December 27, 2010 – 07:35 am EST

‘Twas the week before Christmas, and somewhere in the market
A lonely bear was stirring, eying his pessimistic target.
While the bulls they were waiting by the ticker with care,
In hopes that St. Nicholas would keep prices rising up there.

As luck would have it neither the bulls nor the bears had much to be excited about and Christmas came and went rather quietly.  Lets take a closer look at the action (or lack of it)…

.

*****Welcome to all our new readers this week.  A Merry Christmas to everyone and thanks for spreading the word!

.

ETF % Change Comparison

.

ETF % Change Comparison

Once again over the last week we saw SMH, QQQQ and IYT lagging the market.  This is a distinct change from the behavior that has characterized the last few months and is an indication that profit taking is highly likely as traders appertite for the more economically sensitive areas is diminishing.  On a positive note however the small caps (IWM) continue to perform very strongly.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

SPY had a good week and continues to look fine (if tired) but no sell signals.

.

QQQQ

QQQQ is drifting but no sell signals at this stage.

.

SMH

SMH has very weak volume flows, is off its highs and is under performing the broad market.  Not a good sign.

.

IWM

The small caps offer confidence to the bulls with their continued strength.

.

IYT

IYT is the only influential ETF on an active sell signal.  Will this prove premature?  Time will tell.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

While the buy signals remain active the widespread ‘Bear Alerts’ show that the market cycle is losing strength.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow & NasDow

Despite our discretionary trading system having the Transports on a sell signal the TransDow continues to maintain an active position in them that is showing a profit of 9.14% after 70 days.  The NasDow on the other hand remains in cash as the Dow is still dominant over the NASDAQ.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

LTMF 80 continues to hold a position in QQQQ that is showing a profit of 13.82% after 91 days.  Liquid Q remains in cash.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

It was a quiet week and little has changed.  What has stayed the same however is the under performance of SMH, QQQQ and IYT which indicates that there is still a good probability of profit taking and that the upside over the short term is likely to be limited.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Merry Christmas and enjoy the holidays!!

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Carol of the Day:

These are the carols that I grew up with.  I know that Christmas has been and gone but this is just too cheesy and awesome not to share:

.

ETF HQ Report – Long in the Tooth

December 20, 2010 – 07:15 am EST

It turned out to be a good week to take off as there was little movement in either direction which was rather what we expected as mentioned in our last newsletter – the market lacked the fuel for a major advance.  I had a great time however rafting off a 23 foot waterfall in Rotorua, picnicking at a secret location in Taupo and relaxing in Kerosene Creek where the water is naturally about 110 degrees Fahrenheit.  At ETF HQ we all hope that you are also enjoying the holiday season.  Now lets take a closer look at this market…

.

Hey, do you enjoy this newsletter?  Please remember to spread the word, thanks.

.

ETF % Change Comparison

.

ETF % Change Comparison

SMH and IYT were the two under-performers over the last week while DIA stole the show.  This indicates that people are becoming reluctant to invest in the more economically sensitive semiconductors and transports while they are seeking out the relative security of the mega caps found in the Dow.  Now, it is a bit premature to read too deeply into this but we can definitely see a change in the behavior we have witnessed over the last few months and that makes profit taking all the more likely.

.

Learn moreETF % Change Comparison

.

1

.

A Look at the Charts

.

SPY

No sell signals for SPY yet but there is unlikely to be much upside potential over the short term.

.

QQQQ

If the RSI turns bearish then a test of the 50 day SMA is likely to be the best case scenario for QQQQ.

.

SMH

Keep a close eye on the semis – if the RSI drops below 50 and the OBV trend turns bearish then expect a test of the April high.

.

IWM

IWM has recently found some volume to back its bullish move so some profit taking to test the April high would be really healthy.

.

IYT

Suddenly the Transports offer the the strongest bearish argument with a fresh sell signal.  A close above $93 would reverse the signal.

.

1

.

OM3 Weekly Indicator

.

OM3 Indicator

While the buy signals remain active the multiple bear alerts warn that this run is getting long in the tooth.

Learn moreThe OM3 Indicator

.

1

.

TransDow & NasDow

.

TransDow & NasDow

Despite the sell signal from our discretionary trading the Transports remain dominant over the Dow and the TransDow continues to maintain its position which currently shows a profit of 9.14%.

The NasDow remains in Cash as the Dow is dominant over the NASDAQ and historically the market has been very unproductive under these conditions.

.

What the TransDow Readings tell us:

The TransDow measures dominance between the DJ Transportation Index (DJTI) and the Dow Jones Industrial Average (DJIA). In a strong market the more economically sensitive Transportation Index should be dominant over the DJIA.

Historically the DJTI has been dominant over the Dow 45% of the time. The annualized rate of return from the DJTI during this period was 18.47% with the biggest loss for one trade sitting at -13.27%. The annualized return from the DJIA during the periods it was dominant over the DJTI was just 4.06% and the biggest loss for one trade was -16.13%. A 4% stop-loss is applied to all trades adjusting positions only at the end of the week.

What the NasDow Readings tell us:

The NasDow measures dominance between the NASDAQ and the DJIA. Using the same theory behind the Trans Dow; in a strong market the more economically sensitive NASDAQ should be dominant over the DJIA.

Historically the NASDAQ has been dominant over the DJIA 44% of the time. Taking only the trades when the NASDAQ is above its 40 week moving average the annualized rate of return was 25.47% with the biggest loss for one trade sitting at –8.59%. The annualized rate on the DJIA during the periods it was dominant over the NASDAQ is just 8.88% and the biggest loss for one trade was –12.28%. A 8% stop-loss is applied to all trades adjusting positions only at the end of the week.

.

1

.

LTMF 80 & Liquid Q

.

LTMF 80 & Liquid Q

The LTMF 80 continues to hold a position in QQQQ and is showing a profit of 13.82% while Liquid Q remains in cash.

.

Historical Stats:

.

LTMF 80 & Liquid Q Stats

.

How The LTMF 80 Works

LTMF stands for Long Term Market Forecaster. It reads volume flows relative to price action and looks for out performance of volume measured on a percentage basis over the prior 12 months. During a sustained rally the readings will reach high levels (near 100%) making it imposable for the volume reading to always outperform price so any reading above 80% will maintain the buy signal. This system has outperformed the market over the last 10 years but performance has been damaged by some nasty losses. It only produces buy signals and only for QQQQ.

How Liquid Q Works

Liquid Q completely ignores price action and instead measures the relative flow of money between a selection of economically sensitive and comparatively stable ares of the market. It looks for times when the smart money is confident and and can be seen by through volume investing heavily is more risky areas due to an expectation of expansion. This system has outperformed the market over the last 10 years and remained in cash through most of the major declines. It only produces buy signals and only for QQQQ. We will provide more performance details on the web site for these systems soon.

.

1

.

Summary

This rally is looking rather tired and there are few signs of fuel to cause any major advances before the end of the year.  There are also few sell signals at this point apart from the Transports that have recently produced a fresh sell.  Keep an eye on the relative performance of SMH, IWM and IYT compared to SPY and DIA; if they can outperform this will be a sign of strength and any profit taking should be seen as a buying opportunity.  If SMH, IWM and IYT under-perform then this will indicate a rising risk level and more substantial profit taking will be likely.

Any disputes, questions, queries, comments or theories are most welcome in the comments section below.

.

Derry

And the Team @ ETF HQ

“Equipping you to win on Wall St so that you can reach your financial goals.”

.

1

.

Thought of the Day:

At this time of year we must remember to take time out and focus on what is important.  Here is a great post from a fellow systems trader Michael Stokes on Wasting a Good Life Trading.  Be sure to subscribe to his blog for some high quality ideas on quantitative analysis as well as other topics of interest to traders.