Sector Screens -- It's All Green

We can view the latest in Short Term Trend Strength across US domestic sectors. What we're trying to develop as traders and investors, is to get a sense for discovering and understanding the nature of the directional bias in various products and most importantly the quality or strength of the developing directional move. This is an entirely systematic top down filter that you are looking at. The signals are based on shorter term structural changes in these respective sectors. This approach can be used as the starting point for developing a comprehensive look when timing sector based trades. From this view, I've filtered 2-3 ETF products/sector to ensure signal breadth and consistency as different ETF products filter different issuers. From this approach we can trade or invest in the ETF product outright or we can revert into leading or lagging issuers within the group. This screen shot enables us to view sector-based biases to allow for dynamic hedging through pairs trading or inter-sector  strategies, long and short.

I designed this system to filter rotational quality or short term trend reliability. This micro component allows us to manage our positional timing and strategy. We use this input in conjunction with a macro system that is based on larger trading time period boundary locations (weekly, monthly, etc) to develop a complete structural understanding of the market in question.. When observing the ETF screen we can see market breadth of the US stock market and directional confirmation from the signal type. We can drill in deeper and asses rotational quality determined by 'CloseS' and 'IntraS' - our 2 signal types - which reflect closing versus intraday (or momentum based) signals. If the product, for example, generates an IntraS (intraday signal), then we can associate aggressive accumulation of the inventory when confirmed with buying vs selling volume and in conjunction with our macro-time period structure locations. Combining the cascade of time frame input and micro signal type and knowing the nature of the bias and breadth within the given sector we start to make better trade decisions.

The values that are represented in the columns reflect the number of days in the short term bias (0.00 is a fresh signal, 1.00 occurred yesterday, etc). Depending on the type of participant you are, you may be looking for 'IntraS' signal types as a short term positioning catalyst in-line with other fundamental inputs or events that you may be suspecting; such as options activity, earnings releases, new deal flow, etc. As a longer term investor, the same logic applies, but I could then use either CloseS or IntraS signals to provide the signal necessary to enter or build positions.


We'll continue to monitor these screens going forward to see if we can detect early-stage weakness or erosion in the current market environment on a sector basis.