KRE is the SPDR Regional Banking ETF for those who don’t follow this sector and I’ve applied the PDQ Dashboard to investigate its potential in the face of continued high dollar POMO and the market surge in general. Regular readers know I’m always tinkering with the PDQ and in the latest version I’ve hidden the Z score values and simply replaced with 2 columns reflecting the relative returns (%R) for each side of each pair trade. I do this to assure that the target ETF . . in this case KRE . . really produces the bulk of each pair trade’s return.  Â
Assuring this correlation in return produces a soother and more consist equity curve . . the overriding goal of the PDQ Dashboard project . . and allows us to trade the focus ETF without the capital requirements and logistical issues incurred by trading 8 pairs. As we can see from the PDQ, KRE has had a nice little run but is now fast approaching the target limits of this excursion in most pairs. Risk motivated traders should probably book KRE gains at this point and wait for the next set of consensus signals before initiating a new position.
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