intermarket analysis using exchange traded funds in asset allocation & portfolio management john...

INTERMARKET ANALYSISUSING EXCHANGE TRADED FUNDS IN ASSET ALLOCATION & PORTFOLIO MANAGEMENT

John J. Murphy Chief Technical Analyst, StockCharts.com

Intermarket Changes

• The Deflation Scenario

• Bonds and Stocks Decoupled

• The Resurgence of Gold

• The Role of Oil

• Asset Allocation

• Economic Forecasting

DOLLAR INDEX NEARS LONG-TERM CHART SUPPORT

December 30, 2004

FALLING DOLLAR IS BULLISH FOR COMMODITIES

March 23, 2005

GOLD AND THE DOLLAR ARE LINKEDMarch 23, 2005

DOLLAR PULLS BACK FROM TOP OF TRADING RANGE

April 18, 2005

EURO AND GOLD BOUNCE OFF 200 DAY LINES

April 18, 2005

+$40 OIL COINCIDES WITH JP MORGAN TOP

April 1, 2005

EXXON MOBIL RISES AS WALMART FALLS

April 1, 2005

WHY NASDAQ LEADERSHIP

IS IMPORTANT October 1st, 2004

NASDAQ 100/S&P 500 Ratio

Sector Rotations

• ▲CRB Favors Basic Materials, Cyclicals

• ▲Bonds Favor Financials and Housing

• Late Cycle = Energy and Staples

• Early Cycle = Tech. and Transports

IT’S TIME FOR CONSUMER STAPLES TO START SHOWING LEADERSHIP –

THEY FOLLOW ENERGYDecember 14, 2004

CONSUMER STAPLES AND ENERGY ARE TOP PERFORMERS FOR 2005 TECHNOLOGY IS THE WORST

January 19, 2005

CONSUMER STAPLES SPDR TESTS 2004 HIGH

January 19, 2005

FIRST QUARTER SECTOR RANKINGS PAINT NEGATIVE PICTURE

April 1, 2005

RETAILERS LEAD MARKET LOWERApril 1, 2005

CYCLICAL BREAKDOWN BAD FOR THE ECONOMY

April 14, 2005

HEALTHCARE TAKES TOP SPOT IN APRILMay 2, 2005

DRUG STOCKS GET BETTERMay 2, 2005

OIL SERVICE INDEX UP AGAINST LONG TERM SUPPLY

April 27, 2005

Intermarket Implications

• Post-Boom Decade: Not Good

• Paper ► Hard Assets

• Using ETFs For Asset Allocation

• Importance of Charts – The Big View

• TA + Economics + Fundamentals

Thank You!