Algokid

Best Stock Market Indicator Ever !!!

INDEX:S1TH   S&P 100 Stocks Above 200-Day Average
22751 142 27
Saw this article on Advisor Perspectives website a while back ( one on the best financial website on the web btw             ), and decided to share it here. S1TH             ( SP             100 stocks > 200 MA index) is a technical indicator that investor can use to find conservative entry and exit point for the stock market. It basically finds the best time for conservative investors to make money. Description continues in comments
the author of the article suggests that the best time to enter (for conservative investors) would be when the index is above 65 % and exit ALL TRADES when it crosses below the 50 % line.

For the more aggressive traders in the crowd, you could go long when the index crosses above the 25 % and 50 % line.

I think this is a great tool to time when to enter and exit the markets. Hope you guys will find it useful. Cheers. :)
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I'm did not calculate the correlation index but but it seems that S1TH strongly correlates with S&P (which is obvious) . Could you please explain why this specific method is somehow better than S&P index itself.
snapshot
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Algokid PRO charttrader
Well, i wouldn't say the the S1TH method is better than using the SPY. the S1TH just indicates the (%) of stocks in the SP 100 that is above their 200 ma. This is can help conservative traders determine when to trade and when to stay in cash.The author, John Carlucci, recommend to go in when 65 % of stocks are above their 200ma. which is pretty conservative. but one can adjust this number to be more aggressive or even more conservative.

for the SPY however i would recommend the use of the 200 ma or 10 month ma to determine when to enter and exist the markets. Although both methods are different, they pretty much do the same thing. Just a matter of choice for the investor.
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Is this true for portfolio trading or for the short term as well? Also why avoid short trades?
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Dear Algokid .... if this is still being monitored ... the above : For the more aggressive traders in the crowd, you could go long when the index crosses above the 25 % and 50 % line. ( Do you know is it understood that 2 of the 3 lower indicators must still be in the " Go " position for the 25 % - 50% OEX for a buy . )
You state that it's from the author .. John F. Carlucci - is that correct . I read his articles and did not see this in his trading guidlines ... I just wanted to confirm it was him.
Also if you see this could you email the answer to me .. as I just by chance came across this site
Oh found your TOS Indicator and blog page to it .. THANKS ...
nacnud1@earthlink.net
Duncan Adams
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**Note: the author uses monthly data for this index.
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Very interesting point. I will look how it works. Thank you.
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Good point Algo kid! It's really good in timing the markets. I've been using it for while and proved to be relatively correct. However if you like to be more sensitive to short term market swings the S&P vs 50-day MA index ( S1FI) would be better.
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commentary from author:

" The OEXA200R rebounded nicely this week to 87%. We're still in healthy, tradable territory and should remain there until early summer when Operation Twist ends."
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commentary from author:

The OEXA200R hit a high of 89% on Tuesday only to drop to 80% after the pathetic unemployment news on Friday (a 6% drop on Friday alone).The OEXA200R at 65% is the sell signal. We're not there yet and are probably due for another rebound to previous market highs before the down trend really takes hold once Operation Twist ends.We're probably at the top of the mountain that we've been climbing since December and from here forward can expect an overall jaggedly horizontal to downward path.
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UPDATE : remember , conservative exit should be @ 65. More aggressive traders may want to hold on until it hit 50. Currently @ 69. Closed ALL my postions ( except the pair trading position. ) Have a good weekend
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Commentary from the Author: (READ)

The OEXA200R dropped again on news that the Euro zombie has reawakened from its brief slumber. It is impossible to imagine how this turns out well over there and, by association, for us. Prepare for the "Perfect Storm of 2012"the end of Operation Twist, slow-mo Euro zone asphyxiation and disintegration, an Israeli – Iran conflict and oil spike.

Mr. Bernanke will surely reach for the QE cardiac defibrillator one more time. It will be short term good news for the market. But like telling the same joke over and over, you get diminishing returns with each repeat.The actual sell signal is when it drops to 65%. We're not there yet and are probably due for another good rebound before the down trend really takes hold once Operation Twist ends.

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Before everyone get distracted by the "FB" show, just a quick reminder that this index is below 65 , 60 to be exact, which mean this is not a heatlthy environment to add new positions. Weekend comments coming up
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I am in cash as of Monday, time to go and enjoy the warm weather and let the suckers lose there money
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Commentary from the Author:

"Well, hang on. Here we go.

On May 15, the OEXA200R closed out the day at the critical 65% level, the point at which it is advisable to sell all long positions in anticipation of a major market decline. Since mid-2007, the starting point of the Great Recession, the OEXA200R has dropped to the 65% line on 25 July 2007, 16 October 2007, 6 May 2010 and 15 June 2011. In hindsight, each of these dates turned out to be auspiciously timed exit points preceding major downturns.

The final phase of the mathematically inevitable Euro zone asphyxiation and disintegration is under way. Operation Twist is scheduled to conclude at the end of June. An Israeli – Iran conflict and oil spike are likely to follow before autumn. Taken together, the three are going to produce some very nasty and unpredictable synergy. The "Perfect Storm of 2012" has begun.

What is particularly disturbing is the velocity with which OEXA200R has crashed - from 89% to 55% since May 1. At this point, all bets are off. There may be a small rebound in the next month but even so, that would just be a "bear trap" for incautious traders. More likely, the Euro implosion will quash even that brief flicker of hope. Think about this: In the coming mid-June Greek elections, the betting now is that the far Leftists and Communists will come in first and likely even gain a majority. How's that going to affect investor confidence? It's just one indication of how insane the European situation has gone. For all of the above reasons, the most prudent course right now is to just sit on your cash, watch and wait.

The bottom line: my previous estimate that the OEXA200R would have fallen and remain below 65% by August / September now seems quaintly optimistic. How far will the market drop? QE3 might save the day once again, temporarily. But in light of the factors mentioned above, it should come as no surprise if in 2013 – 2014 we end up experiencing a market event worse than that of 2008 – 2009. Luckily, OEXA200R should give us ample advance warning of the next major correction however we want to trade it. Buckle up!"

Don't know about an Israeli- Iran conflict, but i agree 100% with author. Have a great weekend everyone :)
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Same to you.
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Im just curious about how US elections are going to spice this action up a bit
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Same here.
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Commentary from the Author:

"Beware of the "Bear Trap".

In the 50% to 65% zone we're in a very volatile market with a strongly negative trend. Expect any rebounds to be weak and temporary. Trying to snatch a profit in such a situation could end up being a very painful experience. In June, the end of Operation Twist and the Greek fiasco are likely to be the two events that finally knock the market off balance into a tail spin.

The final phase of the mathematically inevitable Euro zone asphyxiation and disintegration is under way. Operation Twist is scheduled to conclude at the end of June. An Israeli – Iran conflict and oil spike are likely to follow before autumn. Taken together, the three are going to produce some very nasty and unpredictable synergy. The "Perfect Storm of 2012" has begun.

At this point, all bets are off. Think about this: In the coming mid-June Greek elections, the betting now is that the far Leftists and Communists will come in first and likely even gain a majority. How's that going to affect investor confidence? It's just one indication of how insane the European situation has gone. For all of the above reasons, the most prudent course right now is to just sit on your cash, watch and wait."

Again , not sure about and Israeli - Iran conflict.

Good trading to you all next week(...if you are trading).
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only 69K Jobs created...what a disaster.
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Commentary from the Author :

``Well, I hope you "went away in May" (May 15 to be precise, you were warned) because June has started off with a bang. The unemployment numbers are a disaster and we still have the end of Operation Twist and the Grexit to look forward to. The next stop is when OEXA200R hits 50% and the bottom really falls out. This might be one long, hot summer.``
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agreed and let's not forget about not so good news from CHINA and INDIA.....a hot summer indeed.
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Commentary from the Author :

"The OEXA200R rebounded 10 points this week, up 7 the day after the Wisconsin election. But don't be fooled; we're still in "bear trap" territory.With Europe in shambles and a Grexit within sight it's just a matter of time before Mr. Bernanke announces another round of QE. No surprise there. The big unknown is whether it will be enough to counterbalance the Euro implosion's effect on the market. That's anyone's guess at the moment. And there's still the hanging question of how long Pres. Obama can keep a lid on an Israel - Iran conflict and the market chaos that will ensue. The long, hot summer of 2012 continues."

Again, I disagree with the possibility of an Iran conflict with Israel. The indicator is still in bearish territory. It might popped over 65 % again next week, but don't be to quick opening new positions. Make sure that 2/3 secondary indicators ( MACD, STOCH, OR RSI) are in positive territory.

Personally , even if above 65 %, i will wait till the end of the quarter before opening new position again.

As always, have a great weekend.
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speaking of Europe, the EU agreed to lend up to 100 billions euro to Spain.
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Interesting not from Lance Robert, at streettalklive.com

" Sell The Rally

Any rally derived from the announcement is likely to be short lived. The headwinds facing the market are far greater than just the Spanish banking system:

- The economy is very weak and susceptible to external shocks

- The Eurozone will slow economic growth in the U.S. — the only real question is how much?

- The "fiscal cliff" will have to be dealt with — but when and will it be too late?

- The debt ceiling debate is approaching, again.

- Emerging markets are slowing as well putting more pressure on the U.S. economy.

- Economic indicators are all beginning to signs of increased weakness

- The Eurozone crisis continues with no real solution in site.

- Corporate profits continue to weaken "


hmmm

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it can be 1-2 months of strange rallies and hopes for better before a slump
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Commentary from the Author :


" STO has flipped from positive to NEGATIVE
RSI is below 50 and is NEGATIVE.

Although the OEXA200R is at 65% we're still in a period of extreme, headline-driven volatility. Sit it out for a while longer…go to the beach, get a tan.

Greeks head to the polls on Sunday. Given the farcical political parties, the voters have a choice between proven incompetence and utter delusion. In hindsight some day, we might look back at this as the event that pulled the Lehman-like thread causing everything to begin to unravel."

Well the author is still pessimistic, looks like Greece will stay in the EuroZone after all, which is good for the markets I guess. But then this just happen see link....

http://www.businessinsider.com/greek-election-results-2012-6

Enjoy the rest of your weekend everyone.......

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of course he is pessimistic, any bad news is good news for the markets these days @TheStalwart notes "this is far from a powerful market positive. It just averts what might have been a disaster." Personally I do not see this resolved until there are structural changes. The current method of pouring more debt into Spain etc and quantitative easing just creates more problems in the medium/long term. Do not see governments learn eventually they will ALL need to default if they continue this practice. Surprise Japan is next http://www.bloomberg.com/news/2012-06-15/ex-soros-adviser-fujimaki-says-japan-to-probably-default-by-2017.html
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Currently @ 68. As per the rules, at least 2 of the 3 secondary indicators should be positive. The RSI is @ 50 , Stoch and MACD are still Negative.

The rumour on the street is that the fed will intervene but not with QE3, more likely with Operation Twist 2.0....hmmm
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Well well, guessthe rumors were true...FED Extending Operation Twist.... What does it mean for the markets ? I don't know yet
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Commentary from the author :
"What a week."....LOL ! what a week indeed....have a great weekend
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nice comeback, will it last?
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It will last until the technicals say otherwise > https://www.tradingview.com/e/GUU9v1Cz/
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Commentary from Author:

" OEXA200R is once again in tradable range. Enjoy it while it lasts."

Simple enough :)
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SubZero Algokid
haha exactly my thoughts, I published the chart before this with the same title
Enjoy the Risk ON rally while it lasts

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World PMI # are coming out in the next hours. South Korea and China PMI are down from last Month. If the Majority of the PMI are under 50, I think it's safe to say we're in a global recession. Anyway, schedule for number release is below. Good night


China: Official PMI -- 50.2, down from 50.4 in May
Netherlands: NEVI Netherlands Manufacturing PMI -- 48.9, up from 47.6 in May
South Korea: HSBC South Korea Manufacturing PMI -- 49.4, down from 51.0 in May
Taiwan: HSBC Taiwan Manufacturing PMI -- 10:00 PM EST, 50.5 in May
Vietnam: HSBC Vietnam PMI -- 10:00 PM EST, 48.3 in May
China: HSBC China Manufacturing PMI -- 10:30 PM EST, 48.4 in May
Indonesia: HSBC Indonesia Manufacturing PMI -- 11:00 PM EST, 48.1 in May
India: HSBC India Manufacturing PMI -- 1:00 AM EST, 54.8 in May
Russia: HSBC Russia Manufacturing PMI -- 1:00 AM EST, 53.2 in May
Ireland: NCB Republic of Ireland Manufacturing PMI -- 2:00 AM EST, 51.2 in May
Poland: HSBC Poland Manufacturing PMI -- 3:00 AM EST, 48.9 in May
Turkey: HSBC Turkey Manufacturing PMI -- 3:00 AM EST, 50.2 in May
Spain: Markit Spain Manufacturing PMI -- 3:15 AM EST, 42.0 in May
Czech Republic: HSBC Czech Republic Manufacturing PMI -- 3:30 AM EST, 47.6 in May
Italy: Markit / ADACI Italy Manufacturing PMI -- 3:45 AM EST, 44.8 in May
France: Markit France Manufacturing PMI -- 3:50 AM EST, 44.7 in May
Germany: Markit / BME Germany Manufacturing PMI -- 3:55 AM EST, 45.2 in May
Greece: Markit Greece Manufacturing PMI -- 4:00 AM EST, 43.1 in May
UK: Markit / CIPS UK Construction PMI -- 4:30 AM EST, 45.9 in May
Australia: AiG and PwC PMI -- 5:00 AM EST, 42.4 in May
Brazil: HSBC Brazil Manufacturing PMI -- 9:00 AM EST, 49.3 in May
US: Markit US Manufacturing PMI -- 9:00 AM EST, 54.0 in May
Mexico: HSBC Mexico Manufacturing PMI -- 10:30 AM EST
GLOBAL: JPMorgan Global Manufacturing PMI -- 11:00 PM EST

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Commentary from the author:

"OEXA200R is barely hanging on above 65%. Two of the three secondary indicators are negative.The market is poised at a tipping point; volatility and risk have increased substantially. Based on this indictor system, the current conditions are untradeable."

interesting. Have a great weekend guys.......:)
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Commentary from the Author :

"OEXA200R has been stuck in a range for the past two months, treading water around the 65% level. This is a zone of high volatility and uncertainty. The best that can be said is that so far we have avoided a precipitous drop below the 50% level like we experienced during the summers of 2010 and 2011. With any luck, the worst may be behind us and we might even experience a minor rally come autumn."
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"...minor rally come autumn." Is...Is that optimism?
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http://www.advisorperspectives.com/dshort/guest/John-Carlucci-111128-Best-Indicator-Ever-Part1.php
Link to the original article Thanks Algo kid for sharing.
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Algokid PRO learntotrade30
Yup, there you go , that `s the link.
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Algokid PRO learntotrade30
Best Finance website in my opinion
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You mean http://www.advisorperspectives.com/
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commentary for the author:

" After another whip saw week, the OEXA200R reached 76% after Friday's rally.Based on this analysis system, the current market conditions are now tradable. For how long, who knows? I write here ... without the benefit of a crystal ball."

Have a great weekend everyone :)
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dimes Algokid
Thanks Kid I like how you are on top of this thing and keep everybody informed. I think the more people learn and teach the better they grasp the concepts themselves. It certainly reflects in your work Good Job!!!
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I really appreciate the feedback Dimes. I hope my charts helped people in their trading/investing. Like many of us here, i'm here to learn, and i can honestly say that my trading/market knowledge has improved over the past 7 months or so, I learned so much from here. This is probably the web's best community for traders/investors.
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and best kept secret too :)
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Hi Algo, thank you very much for updating this thread. Where are you getting these "commentary" from?
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Algokid PRO charttrader
http://advisorperspectives.com/dshort/guest/John-Carlucci-Best-Indicator-Ever-Update.php

There you go !
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Global PMI numbers are coming out tonight. Japan, and South Korea numbers are down. Waiting on China's PMI. Will post updated data later on around 11 pm E.S.T
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PMI # ( if you care) better than i expected

SCORECARD
Japan: Markit/JMMA Manufacturing PMI -- 47.9, down from 49.9 in June
Netherlands: NEVI Netherlands Manufacturing PMI -- 48.9, unchanged from 48.9 in June
South Korea: HSBC South Korea Manufacturing PMI -- 47.2, down from 49.4 in June
China: Official PMI -- 50.1, down from 50.2 in June
Taiwan: HSBC Taiwan Manufacturing PMI -- 47.5, down from 49.2 in June
Vietnam: HSBC Vietnam PMI -- 43.6, down 46.6 in June
China: HSBC China Manufacturing PMI -- 49.3, up from 48.2 in June
Indonesia: HSBC Indonesia Manufacturing PMI -- 51.4, up from 50.2 in June
India: HSBC India Manufacturing PMI -- 52.9, down from 55.0 in June
Russia: HSBC Russia Manufacturing PMI -- 52.0, up from 51.0 in June
Ireland: NCB Republic of Ireland Manufacturing PMI -- 53.9, up from 53.1 in June
Poland: HSBC Poland Manufacturing PMI -- 49.7, up from 48.0 in June
Turkey: HSBC Turkey Manufacturing PMI -- 49.4, down from 51.4 in June
Spain: Markit Spain Manufacturing PMI -- 42.3, up from 41.1 in June
Czech Republic: HSBC Czech Republic Manufacturing PMI -- 49.5, up from 49.4, in June
Italy: Markit / ADACI Italy Manufacturing PMI -- 44.3, 44.6 in June
France: Markit France Manufacturing PMI -- 43.4, down from 45.2 in June
Germany: Markit / BME Germany Manufacturing PMI -- 43.0, down from 45.0 in June
Eurozone -- Markit Eurozone Manufacturing PMI -- 4:00 AM EST, 45.1 in June
Greece: Markit Greece Manufacturing PMI -- 41.9, up from 40.1 in June
UK: Markit / CIPS UK Construction PMI -- 45.4, down from, 48.6 in June
Australia: AiG and PwC PMI -- 5:00 AM EST, 47.2 in June
Brazil: HSBC Brazil Manufacturing PMI -- 9:00 AM EST, 48.5 in June
US: Markit US Manufacturing PMI -- 9:00 AM EST, 52.5 in June
Canada: RBC Canada Manufacturing PMI -- 9:30 AM EST, 54.8 in June
Mexico: HSBC Mexico Manufacturing PMI -- 10:30 AM EST, 55.9 in June
GLOBAL: JPMorgan Global Manufacturing PMI -- 11:00 AM EST, 48.9 in June


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Commentary by the author :

" After another wild ride, the OEXA200R ended in positive territory for the second week in a row.Based on this analysis system, the current market conditions are tradable. There’s still a lot of headline driven volatility but with any luck, this may be the early beginning of an autumn rally."

Have a great weekend everyone
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Commentary from the author :

" At 75% and Very Tradable

The OEXA200R ended the week in solidly positive territory once again. Based on this analysis system, the current market conditions are very tradable. "

Enjoy the rest of your weekend everyone
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big move down this week from 78 to 70 currently , that 's huge. Still in tradeable territory , but be careful, perhaps this a good time to adjust your stop losses.
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Thank you for the update.
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The OEXA200R finished strongly once again. Based on this analysis system, the current market conditions are very tradable.
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Algokid PRO charttrader
Hi Trader

Yeah still tradable, despite the drop from 76 to 69. September should be interesting. Job # coming up this Friday.
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Yep, will see.
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QE3 is coming...............

http://static4.businessinsider.com/image/5049fdefecad04a361000008/throwing-money.gif
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Commentary from the author:

" The S1TH finished strongly once again, this time in the wake of a new ECB crisis-management strategy and speculation that Helicopter Ben is on the way -- perhaps with an announcement of another round of QE as early as next Thursday.

Based on this analysis system, the current market conditions are very tradable."

see you Monday ........
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Commentary from the author :

" Weekly Increase from 82% to 87%


The S1TH finished strongly once again -- this time with the Fed's announcement of an unprecedented round of open-ended QE (pre-determined end date). In fact, as of Wednesday's close, the day before the Fed announcement, the S1TH was down a point from last Friday's close, at 81%. So all of the weekly gains, plus an extra percent, were delivered by Helicopter Ben.

Based on this analysis system, the current market conditions are very tradable. "


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Thanks for sharing! Really appreciate it.
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Algokid PRO HinduMVP
you are welcome.
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Commentary from the Author :

"Weekly Drop from 87% to 81%, But Very Tradable


The S1TH finished strongly once again. Based on this analysis system, the current market conditions are very tradable."


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Hi,

I haven't updated this one for a while since the indicator was above 65 % for more than two month, BUT now it's at 57. meaning that you shouldn't take any new long positions and perhaps close all your position right now ( if you are a conservative investor like myself ).

Commentary from the author :

" The S1TH closed the week down 10 points at 59%.

Based on this analysis system, the current market conditions are un-tradable. It's time to relax and watch the political dance near the edge of the Fiscal Cliff. Can we waltz around it without falling off? "

there you have it. Have a great weekend guys.

Cheers, @lgokid
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Indicator is above 65 (as of yesterday close) .Risk ON. More updates this weekend.
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PMI reort (if interested)

Japan: Markit/JMMA Manufacturing — 46.5, down from 46.9 in October
China: NBS Official PMI — 50.6, up from 50.2 in October
South Korea: HSBC Manufacturing PMI — 48.2, up from 47.4 in October
Netherlands: NEVI Manufacturing PMI — 48.2, down from 48.9 in October
China: HSBC Manufacturing PMI — 50.5, up from 49.5 in October
Taiwan: HSBC Manufacturing PMI — 47.4, down from 47.8 in October
Vietnam: HSBC Manufacturing PMI — 50.5, up from 48.7 in October
Indonesia: HSBC Manufacturing PMI — 51.5, down from 51.9 in October
India: HSBC Manufacturing PMI —53.7, up from 52.9 in October
Russia: HSBC Manufacturing PMI — 52.3, down from 52.9 in October
Saudi Arabia: SABB HSBC Manufacturing PMI —57.0, down from 59.8 in October
Ireland: NCB Manufacturing PMI — 52.4, up from 52.1 in October
3:00 AM Turkey: HSBC Manufacturing PMI — 52.5 in October
3:15 AM Spain: Markit Manufacturing PMI — 45.3, up from 43.5 in October
3:45 AM Italy: Markit/ADACI Manufacturing PMI — 45.1, down from 45.3 in October
3:50 AM France: Markit Manufacturing PMI — 44.5, up from 43.7 in October
3:55 AM Germany: Markit/BME Manufacturing PMI — 46.8, up from 46.0 in October
4:00 AM Eurozone Manufacturing PMI — 46.8, up from 45.7 in October
4:00 AM Greece: Markit Manufacturing PMI — 41.8, up from 41.0 in October
4:30 AM UK: Markit / CIPS Manufacturing PMI — 49.1, up from 47.5 in October
5:00 AM Australia: AiG Manufacturing PMI — 45.2 in October
7:00 AM Brazil: HSBC Manufacturing PMI — 50.2 in October
9:00 AM US: Markit Manufacturing PMI — 51.0 in October
9:30 AM Canada: RBC Manufacturing PMI — 51.4 in October
10:30 AM Mexico: HSBC Manufacturing PMI — 55.5 in October
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Are you Ready for QE4 ???
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The index is below 65, basically took a dive from 67 to 60. Based on this system, the market is untradeable. Good timing, since I see no deal for the fiscal cliff.
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Fiscal Cliff Detail : not bad , not bad at all

- Income taxes will stay at current rates for households making less than $450,000 per year ($400,000 for individuals)

- Income taxes for income above $450,000 ($400,000 for individuals) will revert to the Clinton era 39.6% from the current 35%

- Capital gains and dividend taxes for households earning over $450,000 will rise from 15% to 20%.

-the payroll tax will likely revert back to 6.2% from 4.2% for the first $100,000 of income
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A huge jump to 75. the indicator indicates that the market is once again Tradedable. Believe it or not their a way to track when to invest and when to stay out. I will publish it once the ratio function is available here. I will however post an article on it in my blog sometime next week. I also have the code for anyone using think or swim.
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admin PRO Algokid
Thank you for the update.
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RISK ON , this market is Tradeable.
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kietnguyen Algokid
Great posts. Could you post the link to your blog? I was looking for your code for think or swim.

thank you
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Algokid PRO kietnguyen
I will post the code for ThinkorSwim sometime this weekend. Trying to make it better by adding more info My blog is http://www.dalinitrading.com ( make sure to put the www).
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The market is still tradable. The ThinkorSwim code for the other indicator will posted later tonight.
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A blog post on Ratio MA and the ThinkorSwim indicator, are now available on my blog :

http://www.dalinitrading.com/2013/02/ratio-moving-average.html

Have a good weekend
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A slgiht drop from 87 to 82 , but the secondary indicators still confirms that the market is tradeable ( and extremely boring :) )
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At 81% , and with secondary indicators still green, the system indicates that the markets are still tradeable.
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Small deep to 79 %, market is still tradeable, But we ' ll see after Monday .
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JonWu Algokid
Hi, Where can I download your ThinkorSwim indicators for generating the screen plots you have shown at the top of the page?
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Hi ,

I code a slightly different indicator then the one on top of the page . That indicator can be downloaded here : https://www.box.com/s/6un59fdgm807l8rs6qos andyou can read more about it http://www.dalinitrading.com/2013/02/ratio-moving-average.html .

I cannot find the symbol for " S1TH" on think or swim, but the indicator works great.


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UPDATE : with commentary for the author

" According to this system the market is tradable. Not rational, tradable.

The "Printing Press Bull Market" continues. It could be seriously argued that since 2009, Fed intervention in its various forms has for all practical purposes simply camouflaged a second full blown Great Depression. Realistically however, Fed Chair Bernanke can only feed the economy so many cans of QE Red Bull before it eventually crashes. Consider the following realities:

- After 4 1/2 years and trillions of stimulus dollars GDP remains feeble. The stock market balloon is becoming increasingly untethered from the stagnant wealth of the nation - the classic asset bubble

- according to the U.S. Census Bureau, median household income fell 1.5% to $50,054 in 2012, the fourth consecutive annual decline after adjusting for inflation. The typical household now takes in less cash than it did in 1996 when adjusting for inflation. In contrast, income for the top 5% of households rose 5.3% last year, with income gains greatest among the top 1%. The two are definitely related: falling wages have increased corporate profits, stock prices and disproportionately benefitted wealthy individuals whose income derives largely from dividends and capital gains. On the public policy side, the bottom line is that 4 ½ years of multi-trillion dollar effort by the Fed and Washington to bolster Wall Street has just further inflated the wealth of those fortunate enough to be substantive equity holders while those who are not have dropped into lower real income brackets.

- how fragile is the economic picture? Here's one indication: Atty. General Eric Holder (for Pres. Obama) recently stated that he would not criminally pursue the mega-thieves at Bank of America, HSBC and other too-big-to-jail banks because it would just be too "unsettling" for the economy. The Attorney General is afraid to prosecute the most dangerous financial criminals in American history. In essence, the U.S. Government has not just offered the banks the courtesy of underwriting their moral hazard, it's eliminated the obstacle of law for them as well. At this point, Federal policy reeks of desperation. That's how fragile the economy is.

The force driving the S&P to new highs is not actual economic recovery but mass delusion. The idea that no matter what – hell, high water, incompetence or criminality – the U.S. Government will do whatever it takes to keep the systemic banks afloat. That, and the assurance that the Fed will also go to any economically irrational extreme to keep Wall Street and those banks happy (since those banks ARE the Fed, that's no surprise). All in the slim hope that if the bogus appearance of recovery and prosperity can be maintained for long enough, actual recovery and prosperity will somehow materialize in time. But in the certainty that either way those who control Wall Street and the systemic banks will continue to make a fortune.

The recent bull market in the S&P is based on the same mass speculative self-delusion that has characterized every other financial bubble since the Tulip Mania of the 17th century. Will the market crash next week or next month? Probably not. But all the other bubbles eventually ended, and in the same way that this one eventually will."

The author hasn't post any comments in a while so it's great to see is view on this market.

Enjoy the rest of your weekend and see you Monday.

Cheers

Algo
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According to this system the market is tradable. Not rational, tradable. Have a great weekend
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snapshot


As per the system , the market is now "untradable" . Even if the Indext itself is at 87, 2 out 3 supporting indicators are negative ( the Stoch and MACD). Now what does this mean ? does it mean you should sell all your positions ? not really . However, it will be wise to place stop or trailing stop loss on those position. Please refer to the attached chart for the latest update. I made some modification to the MACD study.

Cheers

Algo
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All three indicator are negative ( RSI ,MACD, and STOCH) . Market still untradable
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As per the system rule , this market is still "untradable"/ all three supporting indicators are negative, even if the index is at 76.23 %. September should be a very interesting month. Enjoy the of your weekend.

Algo
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admin PRO Algokid
thank you for the update!
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2 out 3 supporting indicators are positive, index above 65 %, as per the system , market is "TRADEABLE"
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I did some primitive backtests, and just using the index seems to produce better results than using the index plus indicators. My criteria were: long above 65%; cash between 65% and 50% when the index is descending from above 50; short below 50%; long above 50% when the index is rising from below 50.

Do you have any thoughts on this simplified Carlucci system?
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Would you explain the detail of macd, rsi, and stochastic parameter? Thanks
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