SPDR Cons Discretionary ETF (XLY)

(A Top Pick March 11/15. Up 2.70%.) This is an annual situation where he buys at a certain time and sells at a certain time. He does a rotation between consumer discretionary and consumer staples every year. Basically the idea is that staples are lower volatility beta stocks. You want to own those when markets get a little bit shaky. (See Top Picks.)

Has done well because of the under exposure to foreign exchange. If we start to see it weaken in the next month it is time to move on. A one to two month hold.

(A Top Pick Jan 30/15. Up 6.09%.) A great sector for seasonal reasons. This had been in a trend and he bought on a dip. A good trade until about April or May, and then you sell it.

This is a seasonal call. Although he respects the seasonals, he is technical and fundamental. The idea is that you rotate out of the discretionary stocks after the winter, and you go into staples. You then reverse this in the summer. In this case, he waited until December because the staples were the out-performers right up until the end of the year. Then he started to see the staples underperform a bit, so he rolled into the discretionarys late in the year. This is showing the higher highs and higher lows. He thinks this will move until at least April-May.

(A Top Pick Oct 1/14. Up 11.05%.) On a seasonal basis, this still looks very good. This particular security has a positive seasonality from the middle of October right through until the end of April.

Don’t buy today. Restaurants, Disney, Retail, etc. Good from mid October to first week in January. It has an upward long term trend, but it is slightly negative compared to the market and below its 20 day moving average.

Period of seasonal strength for this is normally from the end of October through until May of each year. Chart shows it is doing pretty good this year and this is still in an upward trend. Not outperforming the market though and trading right around its 20 day moving average. Technicals are a little bit mixed right now but they are not bad. You want to continue owning the Consumer Discretionary sector until around the end of April when you could switch to the Consumers Staples (XLP-N). Historically, this has been a good strategy and you can do Pairs trades based on the strategy of changing into this in May and then back again in October.

Consumer discretionary ETF. He recommends it.

He often pairs Consumers Discretionary with Consumer Staples (XLP-N) and we are getting to the critical time very shortly. Historically, you want to be in this one right around November and hold it until, on average, April 22. Just hit an all-time high today. Hang on until you start seeing technical signs of it starting to roll over. He’ll probably be taking profits on this one in the next week or 2.