Adjusting EGA's Sails

Hello again everyone.  We’ve had a pretty significant change over the past week in our EGA trading systems, leading to our tactical models showing bullish at the moment.  There were a couple changes in the past week to differing systems that led to that change. 

Our market momentum system, which was one of the indicators that kept EGA from being invested last fall, has gone from bearish, to neutral around year end, to now showing bullish.  Another system, a composite of a lot of different market trend markers, is also showing bullish.  A few of the different markers that have changed their reading are the overall S&P movement (moving neutral to bullish on the 17th), the monetary component (tracking the difference between the S&P and different fixed income) has gone from bearish to neutral in the past few weeks.  These indicators all trending up have led to some buys in our EGA program.

Of course, SEM uses many different systems for our trading.  EGA isn’t entirely invested at the moment.  Our Price Divergent System (used by SEM since 1992) is still not fully confident of the current rally.  On up days, trading volume has been declining, which has kept that system from wanting to buy further.  The price momentum can help create a situation that leads to higher buys, but the strength of the sentiment isn’t agreeing with the current conditions. 

As always, we will continue to monitor these systems and keep you updated with our decisions and insights to the always-changing market.

Cody Hybiak is a Portfolio Analyst & Investment Advisor Representative with SEM. He assists SEM’s advisors in reviewing their investment allocations as well as importing and monitoring the data that generates the signals inside SEM’s trading systems. Cody received his Bachelor of Science degree in Business Administration (Accounting emphasis) from the University of Arizona with an emphasis in Accounting. He joined SEM in March 2017.