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Index Trading, xjo, dow, dax, ftse
early birds
post Posted: Today, 09:42 AM
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In Reply To: cooderman's post @ Yesterday, 12:01 PM

Thus far, April’s typically strong seasonality has not disappointed. Before this year, the SPX had been up 16 of the last 20 Aprils with an average move of +2.5%. Eight days into April, 2021, the SPX already is +4.25%.



2

More importantly, over the last two decades, Tech has witnessed a major inflection point vs. the overall market in April. As of yesterday’s close, the NASDAQ Composite is +5.66% in April, and the NDX +6.84%.



3
So far, the Tech rally has helped pull the NDX/SPX 14-Day RSI indicator from the VERY depressed 20 level back to 59, but the indicator remains in a one-year downtrend. That will need to change for this move to have staying power.



4
Both the US Dollar and Swiss Franc are at critical spots, near former breakout points and their respective 50 Day MAs.

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kinda think SPX gonna retest that 4105, before it can go any higher. imho. onlu guess work judge by it's last night's movement!

asx200 , might see buyer step in this morning to push it over 7000 again, bit od consolidation at 7000 round number atm. i'm bullish with asx200!! [ little biased]



 
cooderman
post Posted: Yesterday, 12:01 PM
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In Reply To: cooderman's post @ Yesterday, 11:53 AM


If Divergence forms on 4H, there may be a pullback before a push to 7100s.
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cooderman
post Posted: Yesterday, 11:53 AM
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In Reply To: early birds's post @ Yesterday, 09:27 AM

QUOTE
ASX200 future followed SPX , looks gonna have another crack on 7000 today

Looks like a shot at 7100s some time soon EB. Back to the closing high before the Virus.
Weekly Chart.
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early birds
post Posted: Yesterday, 09:27 AM
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There are a number of readings telling us that the SPX is short-term stretched. We’ll review NINE of these below.



2

One is that the SPX’s 14-Day RSI now is overbought for the first time since early September.



3
Another is that a new Demark SELL Signal hit a few days ago. We’ve seen a handful of these come and go over the last few months. While most only led to short-term pauses, the SPX did eventually undercut the price level where each signal first hit. See chart below.

Despite these factors, the SPX’s two recently triggered bullish formations remain in play, with targets of 4,210 and 4,265. Holding above their respective breakout points trumps everything else.



5

As we’ve seen over the last eight weeks, breakout points actually have NOT held up well. Thus, despite the strong moves of late, we should be prepared for any scenario.
Both the XLE and Crude Oil are at important technical junctures – close to their 50 Day MAs and trying to avoid triggering bearish formations.

Copper is getting another shot at bouncing near its 50 Day MA, which has worked well over the last few months.

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Despite a risk-off start in futures markets, the Nasdaq 100 and DJI hit fresh highs despite the use of Johnson & Johnson (J&J) vaccine being halted in the US.

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SPX did really well last night, after scared by J&J news on future market. but there is one thing----volume is thinner !! be cautious

ASX200 future followed SPX , looks gonna have another crack on 7000 today.





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nipper
post Posted: Apr 13 2021, 04:01 PM
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In Reply To: early birds's post @ Apr 13 2021, 10:26 AM

ETFs listed in Australian held $102.8 billion in assets at the end of March, according to analysis of both Australian Securities Exchange and Chi-X data by ETF provider BetaShares.

The milestone comes after investors ploughed an additional $8 billion into ETFs in the first three months of 2021, taking the total investment to $46 billion in new money over the 12 months to March 31.

That represents an 80 per cent increase in flows on the previous year, which BetaShares concluded was the “most rapid growth over a 12 month period in the industry’s history”.

However, that figure includes the major contribution of the Magellan Global Fund (MGF), which was converted from a closed-end fund to an ASX-listed active ETF in November last year. MGF is the largest individual ETF in Australia by market capitalisation with $13.6 billion in assets, almost twice the $7.7 billion held in the largest passively managed fund, the Vanguard Australian Shares Index ETF.

Nonethless, the ETF market’s upward trajectory looks set to continue. BetaShares forecasted total industry assets under management to grow by an additional 25 per cent by December.





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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Apr 13 2021, 11:41 AM
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In Reply To: early birds's post @ Apr 13 2021, 10:26 AM

Thanks for posting eb.

I prefer direct and active investments (including LICs). The proliferation of ETFs is no real help to anyone who thinks they're getting a simple answer to constructing a portfolio, as the various methodologies behind the ETFs indicates.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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early birds
post Posted: Apr 13 2021, 10:26 AM
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Index Methodology Explained

Why you should care about index methodology
The meteoric rise of the ETF industry has had the effect of transforming indices from hypothetical measures of performance into ‘investable assets’.

As indexing strategies continue to gain significant inflows from all types of investors, the scrutiny of construction and maintenance methodologies underlying indices (and the ETFs that aim to track those indices) has intensified considerably.

Here’s why it is important to care about index methodology.



Summary
Index weighting methodologies can have a significant impact on an ETF’s returns
Indices can be market cap weighted, equal weighted, fundamentally weighted, earnings-weighted, dividend-weighted indices and more
When considering allocating to an equity ETF, investors should focus not just on the asset class or universe of equities the ETF provides exposure to, but also on the methodology for the index that the fund seeks to track and whether that is consistent with their desired exposure


What is an index methodology?
Broadly speaking, an index methodology is a set of rules or criteria that govern an index’s creation, calculation, and maintenance. The rules determine the assets that are eligible for inclusion in the index, the formulas by which the index value is calculated, the process for modifying the components, and a timetable for updates.

The indices underlying many of the most popular equity ETFs are market capitalisation-weighted benchmarks, meaning that the companies with the largest equity values receive the largest portfolio weightings. But while the ETF industry has helped to reinforce the popularity of these indices – such as the S&P 500, S&P/ASX 200 and MSCI World – it has also given increased visibility to alternative weighting methodologies.

A number of issuers offer equity ETFs that seek to track indices that are not based on market capitalisation, including:

equal-weighted indices
earnings-weighted and dividend-weighted indices
indices where security weightings are based on top-line revenue, and
fundamental weighting methodology.
When allocating assets to equity ETFs, many advisers and investors focus primarily on the type of exposure desired, for example large cap domestics, small cap internationals etc.

However, the rules used to both select index components and allocate individual security weightings can also have a significant impact on the total return generated by an equity ETF.



Equal weighting methodology
The below table shows the performance of the S&P 500 Index compared to the S&P 500 Equal Weight Index for various time periods to 31 January 2021.

S&P 500 historical returns 31 January 2021
Source: Morningstar. Index performance does not take into account any ETF fees and costs. You cannot invest directly in an index. Past performance is not indicative of future performance of any index or ETF.

The holdings in the two indices are identical, but the S&P 500 employs a market cap-weighted approach whereas the S&P 500 Equal Weight gives an equal weighting to each security. That seemingly minor tweak resulted in a more than 186 basis point p.a. difference over the 20 years to 31 January 2021. With compounding, this equates to a cumulative total return of 310% (equal weight) compared to 189% (market cap-weighted) over the 20-year period.

Each methodology has both advantages and potential drawbacks, which have been evident in different market conditions (remembering that past performance isn’t indicative of future performance).

Market-cap weighting has typically outperformed an equal weight approach in periods of sustained price trends favouring the largest-cap stocks – such as during the last 5 to 10 years when mega-cap U.S. tech stocks have performed strongly. However, the equal-weight approach has tended to more than make up this lost ground when these price trends reversed – and the relative performance of large ‘hot’ stocks has reversed.

In any case, the figures above demonstrate that the weighting methodology selected can have a material impact on bottom line return.

The BetaShares S&P 500 Equal Weight ETF (QUS) aims to track the performance of the S&P 500 Equal Weight Index (before fees and expenses). Like the S&P 500 Index, it holds a portfolio of 500 leading listed U.S. companies, but gives an equal weighting to each (i.e. each stock makes up 0.20% of the fund’s assets upon each quarterly rebalancing).

That means there will be a reduced risk of QUS being heavily exposed to a small number of mega-cap stocks – for example, the top 10 holdings of the S&P 500 currently make up about 28% of assets, compared to just 2% for QUS (as at 31st January 2021).



Fundamental weighting methodology
Turning to an example in the Australian market, the below table shows the performance of the Solactive Australia 200 Index compared to the FTSE RAFI Australia 200 Index for various time periods to 31 January 2021.

FTSE RAFI aus 200 historical returns 31 January 2021
Source: Morningstar. Index performance does not take into account any ETF fees and costs. You cannot invest directly in an index. Past performance is not indicative of future performance of any index or ETF.

The Solactive Australia 200 Index comprises the 200 largest companies by market capitalisation listed on the ASX. The FTSE RAFI Australia 200 Index is designed to track the performance of the 200 largest Australian companies as measured by fundamental size.

Whereas the Solactive Index relies on a market cap-weighted approach, the RAFI methodology uses a ‘fundamental score’ to compute stock. Stocks are selected and weighted based on four fundamental measures of size:

book value
cash flow
sales, and
dividends.
Again, as can be seen from the historical returns shown above, the weighting methodology has had a material impact on bottom line return.

The BetaShares Australia 200 ETF (A200) aims to track the performance of the Solactive Australia 200 Index (before fees and expenses). It holds the 200 largest companies listed on the ASX by market capitalisation.

The BetaShares FTSE RAFI Australia 200 ETF (QOZ) aims to track the performance of the FTSE RAFI Australia 200 Index (before fees and expenses). The portfolio is weighted in a way that aims to reflect economic importance rather than the market capitalisation of its constituents.

https://www.sharecafe.com.au/2021/04/12/ind...logy-explained/
===================

from our own sharecafe

 
early birds
post Posted: Apr 13 2021, 10:15 AM
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Last week, the SPX logged its THIRD STRAIGHT WEEKLY GAIN of at LEAST 1% since the period ending 7/17/20.

This now is the twelfth such streak since 2009. Of the prior 11, the SPX was higher the next week six times (55%), with an average move of +0.5%. While that’s not an overly strong positive bias, five of those six gains were at least 1%, as well. Additional stats and charts are below.

As the Live Pattern Grid shows below, the SPX’s two recently triggered bullish formations remain in play, with targets of 4,210 and 4,265.

The SPX now is getting closer to the upper trendline of its 12-month trading channel. Touching and/or eclipsing that line has coincided with short-term trading tops.

With Banks set to kick off earnings season this week, the KBE and KRE ETFs are noticeably farther below their respective highs compared to others… but each ETF has continued to respect their uptrends since the October lows.

Asian indices continue to display relative weakness, and some are flashing topping patterns. Charts reviewed below include China, Hong Kong, Thailand, Indonesia and India.
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still cautious bullish om SPX . unsure.gif i guess it is overbought situation vs plenty of money printing by most central banks.....

asx200 , looks bullish and it will crack that 7000 and hit all time high soon . imho

 
early birds
post Posted: Apr 12 2021, 09:29 AM
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The SPX logged its sixth advance in the last seven days on Friday, notched another new all-time high, eclipsed 4,100 for the first time and finished the week at its highs, too. It was the third straight gain of less than 1%, but it was more than enough for the recent breakouts to live another day (targets 4,210 and 4,265, respectively).


2

It was again a small net move on light volume, but these are characteristics of established uptrends. We saw similar action last year during July- August and October-November, as well.



3
The big difference now is that the VIX has been below 20 for eight consecutive days. After yesterday’s sizable call volume in the VIX, it will be interesting to see if the index continues to decline. The VIX dropped again on Friday.



4

The SPX had the best breadth, though everything improved as the day progressed.



Small Caps underperformed all day, though. Within the IWM ETF, the biggest drag was Small Cap Biotech.



6
Biotech has been struggling within large caps, too. The XBI S&P Biotech ETF lost approximately 2% on Friday and closed right near its 200 Day MA, where it bounced from in late March. The first Demark BUY signal hit today since December, 2018 hit today, as well. That’s something to watch, but for any of that to matter, its intermittent rallies need to improve.


7

The IWF Large Cap Growth ETF logged its 7th straight gain for the first time since early August’20. Its last eight day winning streak happened from late May to early June of last year.



8
The XLK Technology ETF logged its third straight weekly advance of at least 2% this week. This hasn’t happened since the weeks ending 3/13-4/3/09 (4 in a row).



9
The NYSE TICK was again very shallow; it’s now stayed above the -1,000 mark for eight consecutive sessions, which we haven’t seen since August, 2020.



10
With Composite Volume down considerably this week, the five-day average dropped below 10 billion shares for the first time all year.



For some perspective:



In 2020 post-crash, the 5-day avg LOW was 8.5 billion in late October.



In 2019, the 5-day avg HIGH was just 8.9 billion in early August.
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bullish on price action but cautious on some overbought indicators . unsure.gif

asx200 gonna over 7000 today?? i for one would think it will do it !! most likely!! tongue.gif

 
early birds
post Posted: Apr 9 2021, 09:23 AM
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If the SPX’s morning’s early strength continues throughout today’s session, it officially will trigger a bullish flag breakout, with an upside objective of 4,210.

A continued gripe about the market’s uptrend for nearly the entirety of the rally has been the extremely depressed equity put-call ratio. Not only has this yet to matter, the 10 Day MA of the indicator has continued to move lower.

The SPX’s short-term RSI indicator remains overbought. Again, this condition marked a key trading top in October. But in August, the SPX continued higher for another two weeks before it “mattered.”

The RSI of the IWO Small Cap Growth ETF / Large Cap Growth IWF ratio has fallen to its lowest level (34) since early September – the last time it was oversold. See additional commentary and charts below.---still bearish on russell 2000

The US Dollar continues to battle near its 200 Day MA in the hopes of notching an important key higher low.

The 10 Year Yield has made marginal highs in recent weeks, but has yet to convincingly puncture a clear long-term resistance zone.
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SPX keeps up as Fed back it up with extreme loose policy.

asx200 will have a little retrace judge by it's future action last night, also it hit 7000 at yesterday's cash market. expecting it to range bound today, 6940ish ---7000ish. it's Friday!!
longer term it is bullish as RBA kept rate at 01%.



 
 


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