Hi everyone,
I guess these indicators you are using are all customized using other economic and market timing indicators, would you tell me how you do this?
Thanks,
I got mine from searching through old posts.
Hi,
I actually wanted to say how do you create the chart in p123?
Thanks
Chris’ charts were created in StockCharts.com, a very powerful charting tool, although sometimes a little confusing.
I make mine by abusing the Custom Series tool.
Walter
The (SPY-Cash) Hi-Lo index will go to cash on Monday.
https://imarketsignals.com/2015/avoiding-stock-market-crashes-with-the-hi-lo-index-of-the-sp500/
https://www.portfolio123.com/mvnforum/viewthread_thread,9071#47989
I thought you used 100-d EMA with this timer?
I use the 40 bar SMA of (new quarterly highs - new quarterly lows)% of the S&P500.
This simple timer switching between VTI and BND shows annualized return of 10% with max D/D = -15%.
There is something wrong with your model. Turnover is much too high. I use a trigger of 5%. Here is the buy rule:
Eval(SMA(40,0,GetSeries(“Quart Hi-Lo”))>= 5 ,ticker(“VTI”),ticker(“BND”))
Adding the Composite Market Timer improves returns to almost 17%.
Eval($comp>=50 ,ticker(“VTI”),ticker(“BND”)) | Eval(SMA(40,0,GetSeries(“Quart Hi-Lo”))>= 5 ,ticker(“VTI”),ticker(“BND”))
I must have an error in my custom series then:
(UnivCnt(“hi(0)>=highval(60)”) - univcnt(“low(0)<=lowval(60)”))
invalue!! so after your trading system, we’re entering a bearish scenario when closing today this week under the 20 week moving average, is that right?
Here is the rule I use expressed in percent, -9.4% as of yesterday:
100*(UnivCnt(“Hi(0)=Highest(#High,63,0)”) - UnivCnt(“Low(0)=Lowest(#Low,63,0)”))/UnivCnt(“close(0)>0”)
anybody abandoned this market yet?
I’m also interested to hear from Chris what TA might have told us about the recent drop.
no, still long 130%, up 1,5% for the year, DD 4,5% from high. This market feels like 2015, corrections yes, but no bear market.
USA Bull Case (can change fast)
Earnings trending up like hell, have not seen a market, where earnings trended up and market went to bear market.
still record low interest rates
investor sentiment (again) terrible
USA good demograhics
slowdown yes, but no recession forecast by ECRI
small caps showing good rel. strength
still above 200ma (right sitting on it)
tech revolution (tech, biotech, AI, Energy revolution, converging of industries)
Best Regards (my last bull case is from beginning of 2016!!!)
Andreas
How much of those earning trending up can be explained by Trump’s tax cuts? I assume those were priced in by the large rally in the 2nd half of 2017.
that is what I worry about as well, my system has not seen a spike like that in earnings due to tax stuff.
so I might sell when ma 200 is broken, still thinking…
Make a custom series showing sales growth Q to PYQ for the S&P500. You’ll see +7% growth and increasing growth since the start of 2016. The economy looks good. The trade war issue is a concern, however.
Walter
EDIT: Or better yet, Look at operating earnings before taxes.
No, not at all. Prices being below the 20-week mean – their intermediate-term equilibrium level – is probably just an overshoot of the correction. The error that most investors make is switching to a defensive position (or cash) when temporary, corrective market action occurs. Corrections occur to resolve over-speculation in prices that have moved upward too far, too fast. Corrections are technical, price-centered responses to overextended prices that reposition shares back into equilibrium from overbought conditions.
Overbought conditions were happening in January 2018 as investor enthusiasm about the December 2017 tax reform got out of hand. Stock prices had moved too far above their long-term mean. The resulting corrective action in February and March was likely not the beginning of a bear market. It was simply a temporary price correction, without a change in underlying conditions, which does not call for defensive action.
When, during a correction, prices drop below the 20-week mean it can often simply mean that they have overshot to the downside. Often, because potentially millions of investors are involved, the corrective price response is sloppy and can often overshoot. Of course, this can frighten investors when it appears prices are headed further afield, below the mean. Fear can set in and visions of a bear market play out in the mind. That’s why quantitative systems, as we can build on P123, are mandatory for successful investing.
In the coming weeks, if nothing has changed affecting the underlying, fundamental drivers of prices, then that equilibrium level (20-week mean) will ultimately be re-attained. Markets have a consistent upside bias, so prices generally stay above the 20-week mean. When prices are below the mean, it can provide for a negative weight (out of a number of different factors/formulas) in a ranking system, which is how I have structured some of my RS.
My market regime systems, as has been reflected by others here with their timing systems, is still showing a bullish reading. Although that reading has recently declined somewhat because of a few binary factors ticking downward, so far it appears to be ‘full steam ahead.’
Using the 20-week mean as an indicator has to be taken in the context of the situation. If prices are dropping in a volatile manner to correct temporary technical issues, then not much weight should be put on it. On the other hand, if momentum is declining, earnings are declining, and the economy is steadily losing steam, then a breach of that 20-week mean could be your threshold to exit positions. As with most things in investing, the strength of its applicability depends on the context in which it is viewed.
Chris