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RRG and Bullish Percent Indexes for TSE

TSellersTSellers
edited May 16 in Other Charting Tools
In The StockCharts Outlook Webinar - 2017-05-13, Julius introduces an interesting discussion on using $BPSPX as the benchmark for looking at sector rotation precursors using sector bullish percent indexes ($BPDISC, $BPSTAP........).

In Canada we have the $BPTSE to use as the Bullish Percent Index for the TSE. Can that be useful as a benchmark for looking at possible rotation for Canadian sectors? As there do not appear to be bullish percent indexes available for TSE sectors, is there any meaningful information to be had if one were to use Canadian sector ETF's (such as XMA.TO for example) in the RRG with $BPTSE as the benchmark? Or would there be any meaningful comparisons to result from using $BPTSE as the benchmark and the available S&P bullish percent indexes (such as $BPMATE) instead?

Comments

  • Hi TSellers,

    When experimenting with these type of setups please be careful to compare apples with apples and oranges with oranges!

    As you correctly point out in your first paragraph you need to compare the BP indices for the sectors with the BP index for the overall index. As far as I know these individual sector BP figures are only available for US sectors.

    Comparing a price based item like XMA.TO with a BP number makes no sense.

    I would not advise to compare US based BP data for sectors with the BP for the Canadian TSE. Again apples and oranges !!

    Julius
  • TSellersTSellers
    edited May 16
    Thanks for clarifying that Julius. That's what I suspected.

    1: So in this same vein: at 2014 Chartcon Gatis Roze said he preferred to use the Vanguard Total Market Index (VTI ) instead of SPY. Can one infer from that that if you wanted to look at the RRG for the S&P 500 Sectors, in addition to $SPY, VTI would also be suitable to use as a benchmark (when I just did that, the results from both setups appear to be identical)?
    2: Also, if you wanted to have a look at the Fidelity Select Funds (such as FDFAX, FSCPX, etc.), then again, is it safe to assume that VTI would be a suitable benchmark for that setup?
  • No problem at all!

    1. Yes that is certainly a possibility. The reason why the setups are (almost) identical is because there is a high correlation between VTI and SPY.

    2. Yes same story.

    You may want to refer to an old blog post which I wrote regarding open- and closed universes..

    http://stockcharts.com/articles/rrg/2014/11/boeing-on-final-approach-for-landing-at-lagging-runway.html?st=rrg++open++closed++universe

    Let me know if that makes sense?

    Julius
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