ALPHA GLOBAL – Transports to underperform

UTILITIES, HEALTH CARE, S&P 500 AT LOWS SUGGEST DEFENSIVE SECTOR PERFORMANCE
The quarterly performance ranking for DOW Indices and stocks suggest a similar story like the emerging markets sectoral situation. Equity cycles are know to work together, so the synchronous movement of emerging market sectors and American sectors should not come as a surprise. Financials and Materials are top quarterly performers among DOW indices, while utilities, broad index S&P500 and Health care sectors are the worst performers. According to performance cycles, this worst ranking is dynamic. The defensive sectors should start to perform and transports (the top performer) should falter. This is not an encouraging signal consider the prominence transports are given in a rising economic cycle. We did the NR (numeric ranking) exercise for the 30 DOW stocks. Merck is the worst of the 30 and IBM the best. This suggests owning MERCK and exiting IBM at this stage could not only reduce portfolio risk but also enhance relative performance. The NR idea is to reduce the top ranked stocks from the portfolio and increase or stay invested in the worst ranked stocks.
STOCKS: TOPPING AND BOTTOMING PERFORMANCE CYCLES

LONG GOLD CONTINUES
…VERIZON, KRAFT, DOLLAR INDEX, REMAINS NEGATIVE. EXXON LONG CLOSES.
COCA COLA VS. MAC REGISTERS 10%


Numeric Ranking also showcased Coca Cola at the bottom while MACDONALD’s at the top. Below we have illustrated the performance cycles for both the stocks. The pair still has further upside. We have also illustrated GE vs. CATERPILLAR. Long GE vs. Short Caterpillar. UNITED TECH vs. BOEING, DOW vs. HOME DEPOT are other potential pairs to watch.
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ALPHA is a pair trading, long only – short only strategy and numeric ranking product based on TIME fractals.  Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. The signals are carried over three different time frames viz. sub minor (2-3 days), minor (10-30 days) and intermediate (above 30 days). This is a daily signal product. The signals will be illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.
LONG ONLY, SHORT ONLY portfolio covers DOW, S&P500, SENSEX (INDIA), GOLD, SILVER, EURO DOLLAR, YEN DOLLAR, 10 YEAR US TREASURY BONDS, 10 YEAR GERMAN BUND.
STOP LOSS AND EXITS are activated at 2%
Please feel free to mail us for any clarifications. *This is a strategy product. Long Short strategies are not riskless strategies. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the ORPHEUS TIME ANALYTICS research products.
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