Research on the direction of market indexes is the first step in the top-down/bottom-up trading system at Active-Investor.   Each week a table is posted that shows the weekly momentum (positive or negative) of the major market indexes in the U.S.  Similar information is also posted on selected World Market indexes in a separate table each week.
In addition to being the first element in our trading system, investors find a variety of other uses for our research on market indexes.   Aggressive investors can speculate with call or put options on an index.   More conservative investors may buy put options as a hedge (or "portfolio insurance") for their other investment holdings.   Still other investors may use index research for "market timing," helping them decide when to be invested in index mutual funds.
|U.S. MARKET INDEXES
November 2, 2009
Dow Jones Industrials
S&P MidCap 400
Wilshire Total Market
20+ Year Treasury Bond Fund
iShares Investment Grade Corporate Bond
Sector research can be used in many of the same ways as index research.  Plus, it can guide an investor's attention to timely stocks in certain industry groups that may be poised to either rise or fall in price.  In fact, research on sectors constitutes the second element of the Active-Investor trading system, since the direction of an individual stock is often highly correlated to that of its particular industry.
Our service provides members weekly updates on the technical status of 34 major industry sectors.  These sectors have been chosen to coincide with 34 of the largest Fidelity Select Sector mutual funds.  Each week a table is posted which lists the weekly momentum (positive or negative) of each of the sector funds.  The table also indicates which sectors have changed momentum that week, alerting investors to sectors that are possibly starting to trend in the opposite direction.
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