Tactical Seasonal Switching Strategy Update By: Jeffrey A. Hirsch & Christopher Mistal | April 22, 2021 | Email | Print

As of today’s close, both the slower moving MACD indicators applied to DJIA and S&P 500 are negative (arrows in the charts below point to a crossover or negative histogram on the slower moving MACD used by our Seasonal Switching Strategy to issue a sell signal). At this time, we are issuing our Best Six Months MACD Seasonal Sell signal for DJIA and S&P 500. NASDAQ’s “Best Eight Months” last until June.

 

 

 

SELL SPDR DJIA (DIA) and SPDR S&P 500 (SPY) positions. For tracking purposes these positions will be closed out of the portfolio using their respective average prices on April 23. 

 

Continue to HOLD Invesco QQQ (QQQ) and iShares Russell 2000 (IWM) as NASDAQ’s “Best Eight Months” ends in June.

 

Consider establishing a half position in iShares Core US Aggregate Bond (AGG) with a Buy Limit of $115.00. 

 

Also consider establishing a half position in Vanguard Total Bond Market (BND) with a Buy Limit of $85.65. 

 

Traders/investors following the Best 6 + 4-Year Cycle switching strategy detailed on page 62 of the Stock Trader’s Almanac 2021 should heed this signal.

 

 

Sell SPDR Materials (XLB) and Vanguard REIT (VNQ) as correlating seasonalities end in May. For tracking purposes these positions will be closed out of the portfolio using their respective average prices on April 23.

 

Today’s Seasonal MACD Sell Signal for DJIA and S&P 500 marks the early beginning of the “Worst Six Months.” We do not simply sell and go away instead today’s trades are the start of tactical adjustments that will be made in the portfolios. From now until NASDAQ’s Seasonal MACD Sell (earliest it can trigger is on June 1), the portfolios will be shifted toward a neutral stance. Positions that have historically performed well during the “Worst Months” will be held along with positions that correlate to NASDAQ and Russell 2000. 

 

All current stock and ETF holdings will be reevaluated in upcoming email Alerts. Weak or underperforming positions may be closed out, stop losses may be raised, new buying may be limited and we will evaluate the timing of adding positions in sectors that perform well in the Worst Six Months and presenting you with a new basket of defensive stocks.