AlphaDow Model Portfolio: 20% SPY; 10% GLD; 30% Cash; 20% IWO; and 20% ACWX

Sean Gallagher Has Had Over 25 Followers Rank: 58 Followers: 44 Votes: 24 Years Member: 9 Last Update: 11 December 2017, 8:41 Categories: ETFs
General Market Commentary
Canadian Stocks

Password is AlphaDow (no caps)

Our SWAN Formula (sleep well at night) has been keeping people on the right side of the major trend since 1997.

17 Nov: AlphaGold re-confirms existing buy signal by turning 3 for 3.
14 Nov: AlphaBond has just signalled a new long order for bonds. Use BND, TLT or JNK.

Our model portfolio with corresponding Chart #'s:

1. 20% SPY (and/or 2. HXT.TO)
3. 10% GLD
4. 30% BND or TLT
5. 20% IWO
6. 20% ACWX

Each position is managed by a unique system, namely 1. and 2. AlphaDow, 3. AlphaGold, 4. AlphaBond, 5. ValueMentum and 6. Dual Momentum respectively.

The Call For The Week of Dec 11th:

The unemployment rate in the U.S. fell to a 17 year low at 4.1% giving a boost to stocks and keeping bond yields steady ahead of the next Fed rate hike. Gold has taken it on the chin as crypto assets like Bitcoin continue to rise parabolically. Stay invested and wait for opportunities to add new capital to stocks.


AlphaDow is a 100% mechanical Inter-Market Strategy consisting of FIVE systems: 3 trend following, 1 breadth and 1 based on interest rates.

Add up the numbers in the dots in each indicator pane. A BULLISH state first occurs when the count reaches 5 out of 5. Can be used as a 'regime filter' to signal when the odds are in your favour of going long your favourite stocks or as a system to go long SPY or move to cash/bonds (AGG).

Our systems turned:

BULLISH on the U.S. stock market (SPY) on 3rd March '16 (5 out of 5).
BULLISH on HXT.TO as of the 18th May '16 (5th June '15 was BEAR signal).
BULLISH on GLD as of 12th April '17
BULLISH on Bonds as of 14th Nov '17
BULLISH on IWO as of October 29th
BULLISH on ACWX as of June 1st

Less

1. AlphaDow -- Five points possible. 5=BUY 2=SELL. Use SPY or the strongest (Alpha) ETFs.

Bullish when 5 out of 5 are true (+1):

1. $SPX is trending up (trend is up)
2. Advance/Decline Line is trending up (buying power)
3. $TRAN is trending up (Dow Theory confirmation)
4. Utility Average MA rises (interest rate sensitive Utilities lead)
5. Bonds are trending up (interest rates are low)

74% winning trades (13/18) since 1970. Beats buy and hold with less volatility.

Past performance is no guarantee of future results. This is not investment advice, but is for educational purposes only. Consult your investment advisor for additional information regarding suitability, fees, expenses and short term trading costs.

2. AlphaDow TSX -- 'Canadian Dow Theory' -- send feedback for current ETF Advisor Portfolio

Bullish when 5 out of 5 are true (+1). Stay long HXT.to or XIU.to until 3 turn false (+0).

1. $TSX is trending up (trend is up)
2. Advance/Decline Line is trending up (buying power)
3. $TRAN is trending up (Dow Theory confirmation)
4. Utility Average MA rises (interest sensitive)
5. Bonds are trending up (interest rates are low)

67% winning trades since 1980 - beats buy and hold with lower volatility. Buy and Hold the strongest ETFs or stocks when in BULLISH state. Otherwise hold cash or bond proxy.

Past performance is no guarantee of future results. This is not investment advice, but is for educational purposes only. Consult your investment advisor for additional information regarding suitability, fees, expenses and short term trading costs.

3. AlphaGold - Intermarket System 3=BUY, 1=SELL (GLD or GDX)

Bullish on GLD or CGL.TO when all three systems are on a BUY. Score +1 for each of the following TRUE statements:

1. US Dollar Index 12 wk EMA
2. Oil > 12 wk EMA
3. Dow > 48wk EMA

Buy Gold (GLD) if score is +3 (all three TRUE). Stay invested (long GLD or GDX) until 2 systems turn false (0).

14.8% CAGR with 13.8% max drawdown 1954-1995. *Source: Wall Street Journal - Divining Gold's Next Move 2006

Past performance is no guarantee of future results. This is not investment advice, but is for educational purposes only. Consult your investment advisor for additional information regarding suitability, fees, expenses and short term trading costs.

4. AlphaBond - Intermarket System 3=BULL, 1=BEAR (TLT)

Bullish on BOND, JNK or TLT when 3 systems are on BUY. FLAT (go to cash) when count drops to 1 :



1. Fidelity Financial RS is positive = +1

2. Utility RS is positive = +1

3. Chemical RS is negative = +1

4. Nickel ROC is negative = +1



Financial assets and utilities lead. Inflation is bad for bonds. Source: Formula Research Intermarket Bond Strategy.

5. ValueMentum -- 3 Point System developed by Nelson Freeburg

Bullish on SPY when all 3 systems are TRUE. Sell and go to SHY or cash when all 3 are FALSE.

Logic: when the Nasdaq is outperforming the S&P500 and Growth is outperforming Value, the US Stock market outperforms.

11.7% drawdown and 9.1% CAGR since inception vs. 47% drawdown for S&P500.

Of 17 long entries, 14 were profitable, an 82% batting average. Source: Formula Research December 30, 2003.

6. Dual Momentum 1yr SPY, ACWX or BND

This system looks at two types of momentum. Time series (1yr) momentum for SPY must be greater than T-Bill rates AND greater than ACWX else buy bonds (BND).

This information is presented for education purposes only. StockCharts.com is not responsible for any comments, advice, or annotations presented on this page. Please review our Terms of Use for more details.