Investing Types

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 Investing Types



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The Industrials Sector Index Fund $XLI

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  The Industrials Sector Index Fund $XLI   During this bull market in particular, the one that turned 8-months old earlier this week, Industrials have been a real leader. The Industrials Sector Index Fund $XLI is the best performing sector of them all since the June lows. Now take a look at Industrials on an equally-weighted basis relative to the S&P500 equally-weighted. From a broader perspective, Industrials are breaking out to new 14-year highs relative to the rest of the market: One thing we know for certain is that new 14-year highs are not something we see a lot of in downtrends. This is a group we want to continue to own. It's not anything new. We've been all over this theme since it started to develop last year. Here's Deere $DE for example pushing up against new all-time highs attempting to break out of this massive base: Are you fighting these trends? I can't imagine why you would. There is more sector rotation and emerging leadership taking place in this ...
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overbought BMI doesn’t guarantee an imminent pullback

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Overbought BMI doesn’t guarantee an imminent pullback I also programmed my system to calculate what I call the Big Money Index, or BMI for short. It is the 25-day moving average of unusually big buys and sells for stocks and ETFs. The Big Money players are mostly hedge funds and other institutional players who account for 70% to 90% of all trading volume most days. Just last week, the BMI popped above 80, which put it in overbought territory for the first time since last August. Both the BMI and the  SPDR S&P 500 ETF Trust (SPY)  sold off – before rebounding and surging higher in October. I want to be very clear that an overbought BMI doesn’t guarantee an imminent pullback. In 2020, as the markets and economy were rallying after the COVID-19 shutdown, the BMI stayed up in overbought territory for nearly three months. And yet, there was a lot of money to be made in that time.
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February Hangover.

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  February Hangover . The November through January period is historically the most bullish 3 months of the year. And then comes the February Hangover. We're in the middle of that right now. Look at the average performance of every February going back to 1950: And remember, this is the most bullish quarter of the 4-year presidential cycle. Of the 16 quarters in the entire cycle, the one we're in is historically the most bullish.
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