The goal of this series is to audit the ‘Big Five” stocks in 2007, to determine if “Simple Simon, sell signals were visible.” If so, we can use SS sell signals for when to take profits with the current Big Five.
In the beginning (Q1) of 2007, the “Big Five,” the largest market cap stocks (per etfdb.com) in the S&P 500 were Exxon Mobil (XOM), General Electric (GE), Microsoft (MSFT), Citigroup (C) and Bank of America (BAC). Their price action can heavily influence the movement of the index up or down.
Per the performance chart, Exxon Mobile is the group leader, and Citigroup was the laggard.
XOM Key Points…
1. Did not trade with 100% correlation to the SPX
2. During the turmoil, raised the dividend amount paid
3. A SS Sell signal appeared-actually four total before the price tumbled in June of 2008-see yellow highlighted areas
4. CMF gave more accurate signals than MFI
1. Identify which indicators gave the best previous buy or sell signals
2. Implement the winning signals into your current game plan concerning your holdings
The rest of the week, we will study the remaining “2007 Big Five” to audit the quality of the SS signals.
This will lead to next week’s theme-evaluate the current “Big Five” to know when to take profits and put on our “Bear Suits.”
Enjoy your day!
David O. England
Plan your work, work your plan, and share your harvest! 1 Timothy 2:1-2
This information is for Educational purposes only. It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.
DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy and Associate Professor Emeritus of Finance. This column is presented for educational purposes only and not intended as financial advice.
If you have a question or comment, contact David England at firstname.lastname@example.org.