Volume & money flow · daily rule · Sectors
Money Flow Index on Materials Select Sector ETF
XLB with the play, last two years
Shading shows the play's call from the close that triggered it.
Money Flow Index (14)
Dashed lines at 20, 80.
Growth of $10,000 since 2005
Log scale. After trading costs, with T-bill interest while out.
The record
The play against buying and holding XLB over exactly the same dates, after costs.
| Play, since 2005 | Hold, since 2005 | Play, 5 yrs | Hold, 5 yrs | |
|---|---|---|---|---|
| Annual return | +6.9% | +8.1% | +13.6% | +6.1% |
| Total return | +329% | +442% | +88% | +34% |
| Worst drawdown | −59.8% | −59.8% | −18.0% | −24.7% |
| Volatility | 18.0% | 23.1% | 13.5% | 19.1% |
| Sharpe ratio | 0.36 | 0.38 | 0.73 | 0.21 |
| Time invested | 39% | 100% | ||
| Switches per year | 1.8 | 0 |
Every call, graded
Right on 28 of 39 closed calls (72%). In calls averaged +7.8%; out calls saw XLB move +3.4% on average.
| Called | Call | Price | Until | XLB moved | Result |
|---|---|---|---|---|---|
| Oct 2, 2026 | IN | $48.86 | now | +1.8% | open |
| Jan 16, 2026 | OUT | $48.06 | Oct 2, 2026 | +1.7% | ✕ wrong |
| Dec 20, 2024 | IN | $41.21 | Jan 16, 2026 | +16.6% | ✓ right |
| Mar 8, 2024 | OUT | $42.48 | Dec 20, 2024 | −3.0% | ✓ right |
| Jan 18, 2024 | IN | $39.05 | Mar 8, 2024 | +8.8% | ✓ right |
| Jan 2, 2024 | OUT | $40.59 | Jan 18, 2024 | −3.8% | ✓ right |
| Sep 25, 2023 | IN | $37.29 | Jan 2, 2024 | +8.9% | ✓ right |
| Jan 17, 2023 | OUT | $38.61 | Sep 25, 2023 | −3.4% | ✓ right |
| Jun 21, 2022 | IN | $34.74 | Jan 17, 2023 | +11.2% | ✓ right |
| Nov 11, 2021 | OUT | $40.49 | Jun 21, 2022 | −14.2% | ✓ right |
| Jun 25, 2021 | IN | $37.02 | Nov 11, 2021 | +9.4% | ✓ right |
| May 11, 2021 | OUT | $39.39 | Jun 25, 2021 | −6.0% | ✓ right |
An in call is right when the price rose before the next call; an out call is right when it fell. The latest 12 of 40 calls shown.
How the play works
- In when the 14-day MFI crosses up through 20.
- Out when it crosses down through 80.
The creators also stress divergences, which this rule ignores.
The case against
Valeriy Zakamulin tested moving-average timing on up to 155 years of U.S. stock data and found no statistically significant edge in the second half of that record. The rules earned their keep in a few severe bear markets and lagged buy and hold for long stretches in between.