Recently I was looking at Price-195-Day EMA graphs for a number of international countries and I came upon one for Italy, a country in distress. While I normally view this graph over a one-year period to gain additional clarity, I changed the scale to three years as that is the time frame I used for the QPP and Delta Factor analysis. I noticed that EWI hit a peak around May of 2012. As a curious observer, I wanted to know what the Delta Factor was projecting around that period so I ran a monthly analysis for the 38 international countries beginning on March 1, 2012. Three years of historical data was used for each calculation. Here are my results.
On March 1, 2012 there were 26 Sell, 12 Hold, and zero Buys. None.
On April 1, 2012 there were 25 Sell, 12 Hold, and only one Buy. The Buy was EWI and it turned out to be a bad time to purchase this ETF.
May 1, 2012 there were 17 Sell, 19 Hold, and 2 Buy signals. We expect to see Hold signals most of the time.
June 1, 2012 there were 12 Sell, 19 Hold, and 7 Buy.
July 1, 2012 there were still 12 Sell, 18 Hold, and 8 Buy signals, an increase of one.
August 1, 2012 saw 12 Sell, 20 Hold and Buys move down to 6.
September 1, 2012 there were only 9 Sell, 25 Hold, and 4 Buy.
October 1, 2012 there were 14 Sell, 22 Hold, and 2 Buy. Check the EFA graph to see where the broad international market is doing.
November 1, 2012 found Sell down to 11, 23 Hold, and 4 Buy signals.
December 1, 2012 there were 12 Sell, 22 Hold, and 4 Buy.
As of today, December 21, 2012 we have 15 Sell, 21 Hold, and 2 Buy signals. EWI continues to be one of the two Buys.
While the Delta Factor is no silver bullet, it does tend to project or tilt ETFs in the general direction they eventually move.