Percentages

From last week, Dss said
"Worst sectors today, down more than 2%:

XLF
XME
XLB
VNQ
XHB
XLI"

If you, like me, wish to short, don't short strength. Never short AAPL, it will rip your face off.

This really choppy correction began 5/2.

Last week, I gave you these: in XLF, the performance is:
JPM -10.8%
GS -10%
WFC -08.6%
BRK.B -6.4%
C -12%
BAC -11%
AXP +1%
USB -4.5%
MET -9.2%
MS -12%

And I promised the rest. Here’s the work

In XME, we have
ICO +1%
MCP - 17.9%
RTI +1.9%
CRS –1.6%
RGLD 0.6%
ANV –18%
MEE –3.7%
NEM –8.0%
ANR –16.2%
JRCC –17.34%

In XLB we have
DD – 10.5%
FCX –8.4%
DOW –14.9%
MON +0.7%
NEM –8% (did that one already)
PX –4.3%
APD –4.4%
AA –8.8%
PPG –8.9%
IP –7.7%

In VNQ we have
SPG –0.6%
EQR +1.4%
PSA –1%
HCP –8.3%
VNO –2%
BXP 0%
HST –5%
AVB +4%
PLD –6.1%
HCN –4.8%

In XHB we have
PIR –6.7%
TPX –6.4%
PHM –9.4%
BBBY –6.4%
MHK +1.4%
LEG –9%
OC –2.9%
WSM –12.2%
RYL 0
DHI –8.1%

In XLI we have
GE –9.7%
UTX –7.5%
UPS –6.8%
CAT –12.6%
MMM –6.2%
BA –6.7%
UNP –2.8%
HON –7.2%
EMR –15.4%
DE –16.6%

How can this data be used? First, you can see how any individual stock fares versus the SPY since 5/2. The SPY lost 5.3%. So we call this factor “relative strength,” over a period of around 26 trading days. BA’s relative strength is almost the same as the SPY, while DE is around ½ the relative strength of BA.

The second thing we can do with this data is determine a possible momentum trade. Momentum trades are all I do because I do not try to find a top or a bottom, and look for in-channel prices. When the price falls out of the channel, the momentum trade is over. I think yesterday, Mannwich set a momentum trade on C. Good trade. Relative strength compared to SPY is really poor. I too am short C, and have been for a number of days. When it falls out of its downchannel, I’m out.

The third thing we can do with this data is determine possible longs, when the turn-around does start. For example, you see AXP in the financials has a 1% increase while the SPY has a 5% decrease. When the SPY turns around, it is likely that AXP will follow it up faster than a stock that lost say 12%, assuming AXP has some correlation with the SPY. You can check this by overlaying the 2 charts. (you have to be careful with this one, because of something like MHK, the volatility might falsify your observations). (As might the short interest).

The 4th thing we can do with this data is determine who might pop as a result of a short-covering rally. Like ANV and JRCC have lost the most, maybe by shorts (you can’t get recent short interest, only the members of the exchanges get this data and it’s kept secret, so you have to guess). So on a short-covering rally, they may pop the highest.

So there’s your data. As I promised.

On a personal note, Friday I have to travel to Hong Kong, because now I am persona non-grata in China, and I have some meetings with some Chinese. The boss wants to send me to Taiwan for the next phase, but this means I can opt out of my contract (I think they forgot this clause) and I get my pension. Remember, youngsters: hope springs eternal. Like DSS says, the hard work pays off. So tomorrow I may not be on-line, but I should be back by Tuesday night next week. So I shouldn’t miss a post.