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May 20, 2019

War. What is it good for?
For uncertainty, chaos, and unsettling financial markets.


Preview from my weekly report*

Our asset management clients have outperformed and made positive absolute and risk-adjusted returns--even as the S&P 500 fell 6.24% in 2018 and is now 2.77% below its peak at 2940.91 on 9/21/2018. We offer complete transparency, anytime access to your funds, and low fees. You keep control over your money. See:
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Historically, seasonal tendencies would support an unsettled market outlook. Stocks have been somewhat bearish from 5/20 through 5/23. Stocks have been somewhat bullish from 5/27 through 5/31. Stocks have been choppy and mixed from 6/3 through to 6/12.

Sentiment indicators appear somewhat oversold for the short term but still overbought for the medium term. Investor sentiment became overconfident after the Q1 oversold price bounce for stocks, which was not a confirmed new bull market. It may take some time to fully correct that overbought condition, supporting an unsettled market outlook.

The percentage of S&P 500 stocks above their 50-day SMAs fell to 49%, down from 92% on 3/1/19. This shows a loss of bullish stock market momentum and continuing bearish momentum divergence compared to the S&P 500 price index.

Although the LargeCap S&P 500 stock price index ETF (SPY) is only 3.09% below its 52-weeks high, the following index ETFs are underperforming and bearishly diverging: Emerging Markets ETF (EEM) is 14.54% below its high, BRIC (BKF) 12.15% below, SmallCap (IWM) 11.85% below, Foreign Developed Markets (EFA) 9.96% below, Dow-Jones Transportation (IYT) 9.74% below, MidCap (MDY) 7.94% below, Dow-Jones Industrial (DIA) 4.41% below, and NASDAQ 100 (QQQ) 4.33% below.

Long-term U.S. stock sector rotation continues to give a mixed message, supporting an unsettled market outlook. Both defensive and cyclical sectors are demonstrating the best trend strength: Technology, Real Estate, Utilities, and Consumer Discretionary sectors are strongest.

Meanwhile, the following sectors remain relatively weak for the long term: Energy, Health Care, Financial, and Materials.

The U.S. Dollar rose to its 2-year high and remains systematically bullish for the long term. Traders buy the Dollar when they are concerned about risks to global stability.

Gold (GLD) fell sharply, erasing all gains of the previous week and more. This price action does not suggest a rush to safety. Gold remains systematically neutral.

Silver (SLV) fell to new 5-month lows and remains relatively bearish compared to Gold.

Crude Oil (USO) rose on news of escalating tensions with Iran. Oil turned systematically bullish for the long term. War in oil-producing regions would be bullish for the price of oil.

Foreign and Emerging stock markets remain weaker than U.S. stock indexes. Foreign markets are important because they have led the U.S. stock market at important price turning points in recent years.

U.S. Treasury bond ETFs (TLT and IEF) rose above highs of the previous 6-weeks, confirming short-term uptrends. Bonds also remain systematically bullish for the long term. Traders buy U.S. bonds when they are concerned about risks to global stability.

The full report offers clear and unbiased guidance on the following each week:
Global stock markets
The Defensive stock sectors
The Health Care sector
The Cyclical sectors
The Technology sector
The Financials sector
U.S. bonds and notes
Commodities (Oil, Metals, Agriculture)
Objective Quantitative Rankings for hundreds of Exchange Traded Funds

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Now is the time to take action. Preserve your capital by placing your assets under our careful management--before the next major bear market of -20% to -50% devastates most portfolios.

Make no mistake, the ongoing global economic and financial crisis has not been fixed by any sound or lasting solution. History shows that the authorities will not protect you or give you any advance warning--but we will.

If you agree that making money while staying safe is better than taking big risks in the stock market and exposing your nest egg to potentially ruinous losses, we would be very happy to implement our time-tested strategies for all of your assets. It makes good sense to choose protection--especially at this time when the financial world is stretched out of proportion.

We are always happy to discuss your goals and concerns and answer all your questions.
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Weekly Rankings of Major Trend Relative Strength

My weekly Top 10 ETFs ranked by the Major Trend Relative Strength outperformed the S&P 500 by over an 11-year period of real-time weekly tests. Click here for a graph of simulated performance.

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My latest book was named one of the top investment books by Stock Trader's Almanac 2005. This book also received an excellent review in the November 2003 issue of Futures.
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My ETF Rankings are not investment advice. Rather, they are an objective ongoing research study.

Analysis of market forces may offer a sense of probabilities. But the many variables that can impact market prices are notoriously difficult to predict. And, market analysis is something less than an exact science. So, sound trading tactics are always recommended. See my
Money Management Rules.

According to CFTC Rule 4.41, hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

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Robert W. Colby, CMT,
is a consultant to institutional and private investors and traders, providing regular analytical reports, custom research services, and trading systems tailored to clients' objectives. Clients include the most successful traders and investors in the world. Robert is the author of The Encyclopedia of Technical Market Indicators, Second Edition, McGraw-Hill, 2003, which has become the standard reference for indicator and trading systems design. Previously, at several large Wall Street firms, Robert worked as a proprietary trader, technical analyst, and fundamental analyst. He also was adjunct professor at New York University and New York Institute of Finance, where he developed new courses on technical analysis and market timing.

Robert W. Colby is a Chartered Market Technician (CMT), an accreditation granted to members by the Market Technicians Association (www.mta.org) after demonstrating professional competence and ethics over a period of many years. Robert has been a member of the MTA since 1980, and he strongly supports the MTA's high standards. He also supports the MTA Educational Foundation (www.mtaef.org), which works to have technical analysis included in the curriculum of major business schools. Please click the following banner for information about the Market Technicians Association. The Market Technicians Association (MTA) is the national organization of investment analysts, stock market analysis professionals, and certified market technicians in the United States.

 
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Ranking ETFs
"Robert Colby has evolved a system that, while hardly foolproof, is pretty clever," wrote Daniel Fisher, "Surfin' ETFs", Forbes, Investment Guide, Special Issue, June 4, 2007.
Please click here to view this article
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INTERVIEW of Robert W. Colby in Technical Analysis of STOCKS & COMMODITIES magazine, December 2006 issue.
Please click here to view this article
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"Gold's next move: History, logic, and intermarket relationships. See if testing gold's relationship to different markets over a 32-year period provides possible trade signals for the yellow metal."
by Robert W. Colby, CMT.
Please click here to view this article
.
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"Which gold indicators are best? Divining gold's next move."
by Robert W. Colby, CMT.
Please click here to view this free article
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"Applying the Relative Strength strategy to ETFs."
by Robert W. Colby, CMT.
Please click here to view this free article.
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"PUTTING CANDLES TO THE TEST, How Profitable Are They Really?" by Robert W. Colby, CMT. Published in SFO, STOCKS, FUTURES AND OPTIONS MAGAZINE, Volume 5. No. 8. August 2006, pages 91-94. Please click here to buy this article. (Scroll to bottom of linked page.)
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TradingMarkets.com interviewed
Robert W. Colby, CMT.
View the entire interview online
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Active Trader magazine September 2004 interviewed Robert W. Colby. 4 pages. "Robert W. Colby: Technical collector. A discussion with Robert W. Colby about technical trading and his revised Encyclopedia of Technical Market Indicators, Second Edition. By Active Trader Staff."
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For information about
methods that would have performed substantially better than systematic trend-following in back-testing simulation dating back 32 years, email me by clicking on the following link:
Please click here to contact Colby directly.

Click here for a simulated performance graph of one of my trading systems applied to a stock price index.
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MetaStock® PC Software for Technical Analysis
MetaStock® is a powerful technical analysis software program for your personal computer. It offers more than 200 built-in indicators and line studies to enable you to explore a wide variety of methods. And it empowers you to build, back test, and optimize custom trading systems to suit your own particular requirements.
Great new version just released May, 2018.

Click this link to save 7%-9% on MetaStock® software
.
Or, click the banner below for a one-month free trial.

MetaStock Software