Stocks that have disappointed with their earnings announcement have taken it hard. However, the rest of the market, the stocks that either haven't announced earnings or presented acceptable results, have been holding up. I'm typing this on Thursday night, and Apple just announced earnings that didn't meet expectations. Amazon and Deckers are getting hit after hours as well.
Most major ETFs don't look encouraging. But there is one ETF I've focused on several times lately – EEM, the iShares MSCI Emerging Markets ETF. It is slowly and steadily working its way upwards:
There is more volume on up-close days than down-close days. Not a bad looking chart, at least compared to most of the rest of the market.
EEM's seasonal pattern isn't the strongest horse in the stable, but it does have an upward bias this time of year, meaning a historical track record of
producing gains over the next several weeks.
Nine years of history is below my preference of at least twelve years of history for seasonal analysis. But a 5% gain, over the next 9 weeks, with gains
in 7 out of the past 9 years, is good. 5% over 9 weeks may not sound like much, but remember, there are almost 6 9-week periods in a year. Assuming you could roll over into a similar trade at the end of every 9-week period, 5% gain per period works out to 34% a year compounded.
As long as the overall market doesn't tank, EEM could be a reasonable way to diversify your short/intermediate term portfolio.
In recent Seasonal Forecaster newsletters, I covered a way to trade certain stocks using a simple option strategy. I tested this technique on EEM's recent
option prices. Since October of 2011, 12 trades would have met the criteria, and at an average investment of $350 per trade, these 12 trades could have
produced a $794 profit (after commissions and without compounding), for a 127%
To find out more, click here: www.markettamer.com/seasonal-forecaster
By Gregg Harris, MarketTamer Chief Technical Strategist
Copyright (C) 2013 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.
Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.
As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.
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