1. How To Protect Your Portfolio In A Bear Market
John Schlitz
Chief Market Strategist
Chaikin Analytics
© 2013 Chaikin Analytics All Rights Reserved. Proprietary and Confidential.
March 30, 2015

2. What We’ll Cover
• Exploring the Chaikin Method
• Using Chaikin indicators to identify trouble spots
• Qualifying and/or anticipating
breakouts/breakdowns
• Using divergences to identify tops/bottoms

3. 3
© 2013 Chaikin Analytics All Rights Reserved. Proprietary and Confidential.
How Chaikin Analytics Helps You Improve Your Results
• Fundamentals
• Technicals
The Key to Surviving a Bear Market Is Playing Good Defense, which
means constantly monitoring…..

4. 4
© 2013 Chaikin Analytics All Rights Reserved. Proprietary and Confidential.
How Do You Cut Through The Clutter?

5. With The Chaikin Power Gauge

6. Chaikin Power Gauge Rating
Clear summary of a stock’s potential - with a record of success
© 2014 Chaikin Analytics All Rights Reserved. Proprietary and Confidential.
Technicals
• Price Trend
• Price Trend Rate of Change
• Chaikin Money Flow
• Relative Strength vs. Market
• Volume Trend
Experts
• Earnings Estimate Trend
• Short Interest
• Insider Activity
• Analyst Ratings
• Industry Relative Strength
Financials
• LT Debt to Equity Ratio
• Price to Book Value
• Return on Equity
• Price to Sales Ratio
• Free Cash Flow
Earnings
• Earnings Growth
• Earnings Surprise
• Earnings Trend
• Projected P/E Ratio
• Earnings Consistency

7. Why are those 20 factors so important?
• Each one was back-tested for efficacy.
• Combined, they gauge a stock’s 1-6 month potential.
• Bullish PGR stocks significantly outperform.
• Bearish PGR stocks significantly underperform.

9. The Chaikin Analytics Method
Chaikin Buy/Sell Signals
Technical Indicators
Chaikin Money Flow & Chaikin Relative Strength
Chaikin Power Gauge

10. Money-Flow and Relative Strength
10

11. • Power Gauge Rating Bullish
• Relative Performance Strong
• Chaikin Money Flow Strong
What to Buy: Classic Bull

12. Market agrees with the ModelMarket agrees with the Model
CMF stays positive

14. CMF stays positive

16. AAPL - Classic Cup & Handle Breakout with confirming Chaikin Credentials
AAPL: Weekly- 5 Years

17. Playing Good Defense
What to Sell and Avoid

18. • Power Gauge Rating Bearish
• Relative Performance Weak
• Chaikin Money Flow Weak
What to Sell: Classic Bear

19. Negative Chaikin Credentials

20. Bearish Personality ChangeBearish Personality Change
CMF stays negative

21. Negative Chaikin Credentials + Earnings (1)

22. Negative Chaikin Credentials + Earnings (2)

24. H&S top, with negative credentials in the right shoulder
Long-Term Chart Offers A Unique Perspective

25. RIG – 1 Year

26. Early warning - trapped in
lower portion of the range
for an extended period.
When Short-Term Meets Long-Term

27. Strong Chaikin Credentials + Confirmed Breakout = Strength

28. Early Warning = “Avoid”, Confirmed Breakdown = “Sell”

29. Strong Credentials + Confirmed Breakout = “Buy”

30. Sector and Group Analysis
•Ranking sector/sub-sector ETFs via the Power Bar
•Evaluating ETF trend violations/pattern breakdowns
•Identifying strong/weak stocks within an ETF
•Spotting underlying weakness in rising/neutral ETF price action

31. Ranking Sectors via the Chaikin Power Bars

32. Ranking Sub-sectors via the Chaikin Power Bars

33. Viewing ETF component stocks

34. Spotting underlying weakness in rising/neutral ETFs

35. Remember to always check the long-term chart

36. Combining Chaikin Analytics With Basic
Technical Analysis
• Use Chaikin Analytics to:
• Assess the current trend
• Confirm trend changes
• Evaluate breakouts/breakdowns
• Identify divergences before price reacts
• Spot “stealth” accumulation and distribution

37. Evaluate Current Trend

38. Big Base = Big Move

39. Using Personality Changes To Confirm
Price Trend Changes

40. Using Chaikin Credentials To Evaluate Technical Patterns (1)

41. Using Chaikin Credentials To Evaluate Technical Patterns (2)

42. Using Chaikin Credentials To Evaluate Technical Patterns (3)

43. BA - Two confirmed breakouts with early
positive turn in PGR
Using Chaikin Credentials To Evaluate Technical Patterns (4)

44. Institutions fly under the radar
(“stealth” buying and selling)

45. Stealth Distribution (1)

46. Stealth Distribution (2)

47. Stealth Accumulation

49. Chaikin Signals Assist With Timing

50. Relative Strength Buy Signal
• Stock is outperforming the market
• Turning up from an oversold condition
• Crosses above its short-term (21-day) MA

51. HNT with Relative Strength Buy Signals

52. Relative Strength Sell Signal

53. Rules For Weathering A Market Decline
• Monitor your portfolio regularly. (Bear markets don’t announce
themselves).
• Avoid stocks with negative Relative Strength and/or Bearish Power
Gauge Ratings.
• Respect divergences between price and the Chaikin Credentials.
• Check Industry Group Strength (using the Power Bars) as well as the
stock in question.
• Don’t chase internally weak rebounds in Bearish PGR stocks,
especially when Relative Strength is negative.
• Know where major support, resistance and trendlines reside.
• Check for Chaikin Sell signals.

54. Don’t chase internally weak rebounds (1)

55. Don’t chase internally weak rebounds (2)

56. Monitor Long-Term Trends……

57. …….and intermediate trends (1)

58. Intermediate Trends (2)

59. Check the Index and ETF

60. Avoid Stocks in weak Industry Groups

61. Do these……..
• Monitor your portfolio regularly. (Bear markets don’t
announce themselves).
• Avoid stocks with negative PGR’s and negative relative
strength.
• Respect divergences.
• Check Industry Group Strength (using the Power Bars).
• Know where major support/resistance is.
• Check for Chaikin Sell signals.

62. ……and be better prepared for these

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