Tactical Seasonal Switching Strategy Update
By: Jeffrey A. Hirsch & Christopher Mistal
April 05, 2016
As of today’s close, both the slower and faster moving MACD indicators applied to DJIA and S&P 500 are negative (arrows in charts below point to a crossover or negative histogram on the slower moving MACD used by our Seasonal Switching Strategy to issue a sell). At this time, we are issuing our official Best Six Months MACD Seasonal Sell signal for DJIA and S&P 500. NASDAQ’s “Best Eight Months” last until June.
[DJIA Daily Bar Chart]
[SP500 Daily Bar Chart]
Current technical, fundamental, seasonal, sentiment and monetary policy outlooks are aligning to signal increasing odds of a turbulent “Worst Six Months” this year. Year-to-date gains, in an election year, are about in line with historical averages for this time of the year, but the ride to get here in Q1 is troubling. Lower lows and lower highs in Q1 compared to Q4 and the pace that losses accumulated in Q1 could be a sign of further trouble.
SELL SPDR DJIA (DIA), SPDR S&P 500 (SPY), Vanguard REIT (VNQ) and iPath Bloomberg Copper TR Sub-Index ETN (JJC). In addition, the remaining open buy idea in the Almanac Investor ETF Portfolio, iShares U. S. Technology (IYW) is cancelled.
Continue to HOLD technology and small cap related ETFs as NASDAQ’s “Best Eight Months” ends in June.
BUY half positions in AdvisorShares Ranger Equity Bear (HDGE) on dips with a Buy Limit of 10.70, iShares 20+ Year Treasury (TLT) on dips with a Buy Limit of 129.75 and iShares Core US Aggregate Bond (AGG) on dips with a Buy Limit of 110.35
Traders/investors following the Best 6 + 4-Year Cycle switching strategy detailed on page 62 of the Stock Trader’s Almanac 2016 can ignore this signal, but should strongly considering tightening stop losses and adding some downside protection.
[Almanac Investor ETF Portfolio – April 4, 2016 Closes]
In addition to the above moves in the ETF Portfolio, the two remaining open trade ideas in the Almanac Investor Stock Portfolio are cancelled. Newtek Business Services (NWT) & Standex International (SXI) buy ideas are cancelled. All other stock positions are on Hold. Please note updated stop losses in the following table.
[Almanac Investor Stock Portfolio – April 4, 2016 Closes]
Disclosure Note: At press time, officers of the Hirsch Organization, or accounts they control held a position in CNC, CVS, HBI, QQQ, SMG, TSCO, USO and VNQ.