I am not trying to predict which way the market is headed, I have no crystal ball. I'm just observing the way it is presently trending. The title of my blog is Financial Tides and just like you want to know High Tide, Ebb Tide and Low Tide when you go through an inlet you should know that when your investing also. Never try to swim against the tide.
A Code Green just means the all the indicators observe that the market is in an upward trend, Code Yellow is a confused or neutral trend and Code Red means the market has been trending down.
I try to be long when it's Green, cautious when it's Yellow and short or in cash when it's Red. Observe it, but don't try to outsmart it.
Let's take the BarChart indicators one at a time:
The Value Line index - approximately 1700 stocks. Is the index above or below it's Daily Moving Averages?
- 20 DMA - ABOVE
- 50 DMA - ABOVE
- 100 DMA - ABOVE
This looks very good and appears BULLISH
BarChart Market Momentum - approximately 5900 stocks. What percentage of all these stocks are trading above or below their Daily Moving Averages?
- 20 DMA - 87% are trading ABOVE their DMA
- 50 DMA - 86% are trading ABOVE their DMA
- 100 DMA - 90% are trading ABOVE their DMA
This is also very good and appears BULLISH
BarChart New High to New Low Ratios - number of stock hitting new highs or lows varies
- 20 Day new High/Low ratio - 1986/185 = 11 to 1
- 65 Day new High/Low ratio - 1246/84 = 15 to 1
- 100 Day new High/Low ratio - 1193/52 = 23 to 1
The are a much greater number of stocks hitting new Highs than stocks hitting new Lows - very BULLISH!
BarChart High/Low page
It would appear that the Market is in a strong upward trend and I'm fully invested Long in the Market.
Jim, with that very impressive resume... After all those years performing the duties as an accountant, attorney, registered Rep, as well as working the securities compliance end of things, why of all things did you chose momentum as your style of investing?
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Stylecouncilor,
ReplyDeleteI'm not Jim but will give my own answer to this question. When I first came to Marketocracy, I was a believer in fundamentals and did not buy into TA or "momentum". To this day all my M* long funds are based on fundamental strategies, some good and some bad. When I saw that numerous participants with good track records used TA, I had to try out some strategies if only to discredit TA in my own mind. To my surprise, some momentum based strategies actually do work. As a scientist (in real life), I cannot ignore empirical evidence, even if I lack a theory as to why TA should work. Thanks to Jim for telling us some of his strategies!
- jbloggs
jblogs,
ReplyDeleteSure, many of the top star gathering Marketocracy folks do use TA. But, when you look at most everyone who are top rated on Marketocracy, they all run ten or more funds, with the far majority of their multiple funds seriously lagging the averages. This is bogus. Seems that anyone can get lucky on one out of ten.
The way that Marketocracy rates people, does this encourage short term TA trading?
To me, there is something bogus about the way Marketocracy hands out stars.
-style.
On this site you will see me post just 6 model portfolios and I'll give links to the Marketocracy page so you can check the figures at any time
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