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Monday, 7 May 2018

Cross Sector Zeroing for Portfolio Adjustment: 7 May 2018, Monday, 7.00pm Singapore Time

Cross Sector Zeroing for Portfolio Adjustment: 
7 May 2018, Monday, 7.00pm Singapore Time
(Click on Technical Charts above to Expand)

As we approach the middle of the year of 2018, it is time to have a look across sectors. S&P500 is used as litmus for economic cycle here. Most equity markets worldwide follow similar economic pattern. This is because the global international trade and finance are interweaved reasonably tight now.

Attached above is the Cross Sector Zeroing Technique for Portfolio Adjustment. Each of the sectors is used to contrast against the benchmark S&P 500 Index / S&P500 ETF. Two factors are used to determine strength of sector using the shortest long term timeframe period, namely price action with respect to 20MA-cum-50MA, as well as 20 MA with respect to 50MA, and price relative to peak and bottom of the past 1 year time frame under consideration.

The green boxed sectors are out-performing sectors, blue boxed sectors are on-par sectors with respect to S&P500 basket, amber boxed sectors are slightly under-performed sectors and the red boxed sectors are sectors to generally avoid in current economic cycle and sub-cycle. Based on all the above, worldwide financial markets are in risk-on mode -- smart monies are dumping consumer staples, and the cyclicals and the energy (crude oil) sectors are outperforming. This further double confirms the risk-on mode in world financial markets and double confirms that the world will continue to see strong growth in the next 4 quarters. We are still in bull market for next 4 Quarters.

The trend is likely to continue in the next one year, from mid-2018 to mid-2019. At the approximate half year mark of 2018 which is where we are now, it may be good to adjust portfolio to shift some holdings from on-par sectors to out-performing sectors, and be underweight on very under-performing sectors. The same technique can be done on any market in any part of the world.

Take for instance, as an application, if one reduces holdings from banking and finance sector, and adjust slightly towards cyclicals, energy and crude oil sector/stocks, it is not wrong to adjust in this way for more optimal performance.

Take for instance below, Tiffany & Co (NYSE: TIF), a jewellery company. It is expected to outperform compared to bank stocks or other on-par sector stocks in the coming 1 year. ( Note: $110.00 will break violently upwards easily).

Cross Sector Zeroing for Portfolio Adjustment: 
:: Tiffany & Co (NYSE: TIF) ::
7 May 2018, Monday, 7.00pm Singapore Time
(Click on Technical Chart above to Expand)

Take for instance below, Diamondback Energy (NASD: FANG), an energy/crude oil related company. It is expected to outperform compared to bank stocks or other on-par sector stocks in the coming 1 year. (Note: $132.50 will break violently upwards easily). In fact, there are already 2 very large ascending triangles of re-accumulation going on.

Cross Sector Zeroing for Portfolio Adjustment: 
:: Diamondback Energy Inc (NASD: FANG) ::
7 May 2018, Monday, 7.00pm Singapore Time
(Click on Technical Chart above to Expand)

In almost all markets, cyclicals (including luxuries, commodities, shipping and shipbuilding) and energy/crude oil sectors will be most outperforming in the next 12 months.
Best of Luck.


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