Volume & money flow · daily rule · Sectors
Money Flow Index on Health Care Select Sector ETF
XLV 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 XLV over exactly the same dates, after costs.
| Play, since 2005 | Hold, since 2005 | Play, 5 yrs | Hold, 5 yrs | |
|---|---|---|---|---|
| Annual return | +7.4% | +10.2% | +12.0% | +8.0% |
| Total return | +369% | +721% | +76% | +47% |
| Worst drawdown | −29.6% | −39.2% | −11.0% | −17.1% |
| Volatility | 11.0% | 16.7% | 8.7% | 15.2% |
| Sharpe ratio | 0.54 | 0.56 | 0.91 | 0.33 |
| Time invested | 26% | 100% | ||
| Switches per year | 1.8 | 0 |
Every call, graded
Right on 24 of 40 closed calls (60%). In calls averaged +6.4%; out calls saw XLV move +5.4% on average.
| Called | Call | Price | Until | XLV moved | Result |
|---|---|---|---|---|---|
| Apr 30, 2026 | IN | $144.79 | now | +17.2% | open |
| Jan 14, 2025 | OUT | $135.90 | Apr 30, 2026 | +6.5% | ✕ wrong |
| Nov 5, 2024 | IN | $142.87 | Jan 14, 2025 | −4.9% | ✕ wrong |
| Dec 29, 2023 | OUT | $130.31 | Nov 5, 2024 | +9.6% | ✕ wrong |
| Oct 30, 2023 | IN | $117.79 | Dec 29, 2023 | +10.6% | ✓ right |
| Apr 17, 2023 | OUT | $126.86 | Oct 30, 2023 | −7.1% | ✓ right |
| Oct 3, 2022 | IN | $115.68 | Apr 17, 2023 | +9.7% | ✓ right |
| Mar 31, 2022 | OUT | $127.17 | Oct 3, 2022 | −9.0% | ✓ right |
| Jan 25, 2022 | IN | $118.65 | Mar 31, 2022 | +7.2% | ✓ right |
| Nov 4, 2021 | OUT | $123.86 | Jan 25, 2022 | −4.2% | ✓ right |
| Sep 29, 2021 | IN | $118.81 | Nov 4, 2021 | +4.3% | ✓ right |
| Jan 13, 2021 | OUT | $106.68 | Sep 29, 2021 | +11.4% | ✕ wrong |
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 41 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.