Group Mentoring – Top Down Sector Analysis and Risk Reversal Alpha Discovery on RSI (NVDA)

Top>Down (Sector>Stock Strength Analysis)

  • Major sector etfs (XLE, XLK, XLI, etc.) 
  • Top 10 holdings in each sector (by allocation) 
  • Percentile (Current price within range) 
    • Sectors (sorted high to low)
    • Stocks (sorted high to low) 

General strategy 

  • Identify the top sector and the top stocks
  • BULLISH TRADES: When the markets pull back and the top sector/stocks are STILL stronger (indicated in phase 2 below), this can be a great entry (buy the dip) OR setup for taking the next bullish trigger (momentum)
  • BEARISH TRADES: When the markets rally and the bottom sector/stocks are STILL weaker (indicated in phase 1 below), this can be a great entry (call credit spreads on rallies) OR setup for taking the next bearish trigger (momentum)

Easylanguage for Percent in range indicator to use in radarscreen (or chart): 

vars: 

pr(0);

pr = (c – lowest(l,200)) / (highest(h,200) – lowest(l,200));

plot1(pr);

Symbol list for radar screen (needs to be updated to the new top 10 for each sector)

~XLY - Consumer Discretionary

NKE
CMCSA
HD
TWX(HB)
MCD
F
DIS
AMZN
FOXA
PCLN

~XLP - Consumer Staples

PM
KO
PEP
PG
CVS
MDLZ
MO
WMT
CL
WAG

~XLE - Energy

COP
XOM
PXD
CVX
EOG
OXY
SLB
HAL
PSX
APC

~XLF - Financials

WFC
GS
AXP
BRK.B
JPM
BAC
USB
C
AIG
MET(HB)

~XHB - Home Builders

AOS
TPX(HB)
LEN(HB)
HD
TREX(HB)
DHI(HB)
WSM
WHR(HB)
MDC(HB)
LEG(HB)

~XLV - Health Care

JNJ
PFE
MRNA
UNH
BMY
GILD
ABBV
MRK
BIIB
AMGN

~XLI - Industrials

DHR
EMR
HON
MMM
UNP
GE
BA
CAT
UPS
UTX

~XLB - Materials

ECL
PPG(HB)
IP(HB)
FCX
DOW
DD
LYB
APD
MON(HB)
PX

~XOP - Oil & Gas Exploration

SFY(HB)
GDP(HB)
MTDR(HB)
CRK
WTI
SGY
HK
XCO
PVA
KWK

~XLK - Technology

CSCO
ORCL
MSFT
GOOGL
AAPL
IBM
QCOM
T
VZ

~IYR - Real Estate

PLD
EQR
AMT
SPG
VTR
PSA
BXP
CCI
HCP
HCN

~XRT - Retail

FIVE(HB)
DDS(HB)
ABG(HB)
GPI(HB)
RCII(HB)
LAD(HB)
CONN(HB)
BIG
SUSS
SPLS

~XLU - Utilities

DUK
EXC(HB)
PEG
AEP
SO
NEE
SRE
PPL
D
PCG

~GDX - Miners

FNV
NEM
AEM
GOLD
AUY
AU
NCMGF(D,HB)
SLW
GG
ABX

~Sectors

XLV
XLK
IYR
XLY
XRT
XLP
XLI
XHB
XLU
XLB
XLB
XLE
XOP
GDX