Hi Junkster, this is a continuation of our discussion.
My last post had a link to NYSE up/down volume. I don't know how to save charts on this site but here it is
If you don't mind supply links to support Zweig claims, just like I did..
Junkster: In fairness to Zweig his signal was based on two 9 to 1 days within 3 months. He noted in his book the failure of singular 9 to 1 days. More importantly it is also based on NYSE advance/decline volume and not the [email protected]
- a huge and significant difference. This latest signal meets the criteria so we shall see if it has any accuracy. The point is BOTH of his momentum indicators came into play at the same time- a rarity. If this fails I would put much less emphasis on his indicators.
Edit. To quote myself on indicators. “ They should never be used as precise, absolute, black and white trading signals. Indicators are best used as clues or hints to future price action. Thus interpreting indicators is more art than a science........ What counts in trading is what the market is saying, not the indicators”
FD1000: There's is a small difference in principle between NYSE to SP500.
We had it twice or more in 2009, 2010, 2011 and didn't have it 2012-2019. This means that if you waited for the signal of 2 days within 3 months it never came.
Basically, the facts still stand, you get 1 and more every time the SP500 goes down over 10%...chart
...and it's reasonable. After a 10% correction, you will get days of huge up/down volume.
So, a rule of thumb might be, every time the SP500 goes down more than 10% rebalance...or...even simpler, every time your stocks to bond is 5% off sync --> rebalance.
For my trades I look for indicators that tell me on a specific day when to buy and MACD is pretty accurate.
I would like to see your feedback on Zweig but please purchase his book. What do you mean support his claims? His book is a Wall Street classic. Are you insinuating his test results are fabricated or incorrect?
You are shooting the messenger here. I am simply reporting on his indicators in his book and where he has the dates of all the signals and where the market was 3, 6, and 12 months later.
What struck me is how rare it is when BOTH signals kick in at the same time as they just recently have. According to Zweig we are off to the races now because of this out of the ordinary momentum and the market won’t look back. We won’t have to wait long to see if Zweig still has it or if the markets are so different now as to make them ineffectual. They have never kicked in during a government shutdown so I think that could be the fatal flaw if it drags on for a lengthy period.
Again, welcome to the forum.
I'm not going to buy his book because I can find his ideas on the web + I'm looking for indicators that work in the next day-one week. Over the years I read of several indicators/"gurus" and proved they were all wrong or can be off by months and years. (link)https://socialize.morningstar.com/NewSocialize/forums/p/379703/3896435.aspx#3896435
It looks pretty reasonable that a market that went down over 10% will be up close to that in the next several months.
Since I can't change things that I posted I will not post here very much because I may make a mistake and/or want to change my narrative.
You are welcome to post on M*, any comment is welcome and we can discuss anything, I don't understand your comment "This board does not allow lively discussions because of the manner in which it is monitored." I do that all the time.
We agree on the indicator gurus and another area I have written about extensively. Back in the day I knew most all of them and they all shared one thing in common. None of them were successful traders - not one. They simply pandered ultra expensive and worthless trading systems, etc. The stories I could tell about some of the Pretenders in that field.
You can edit real easily here. You can see a small wheel right top of your post. Click on thst and you see dee “edit”
By the way as you can read below where I am mentioned, my favorite trading book of all time was the one by Nicolas Darvas. Zweig’s is a distance third or fourth.
I have linked her CNBC appearance below. It is titled "Uncertainties remain, but the recent rally is decent." Hope you enjoy.
An important premise to keep in mind is to hold equity based assets for longest optimal periods. Once in a great while, a switch to duration assets for a short period may occur ( 20% of the time) . https://tinyurl.com/yadh6tsq
Returns after larg(est) quarterly market losses ( of which 4th quarter 2018 was one), accompanied by a cross of the S&P 500 above its long period moving average ( pending ), has had a stellar track record with above average returns produced over future 1, 2, and 5 year cum returns periods: https://imgur.com/a/Eoj26AS
Zwieg signal may or may not have accompanied these post quarterly loss events.
Thanks for the Zweig info and all of your other informative and relevant posts here and elsewhere. Please keep 'em coming.
Do drop in.
From the limited time I read the posts on Morningstar, I am impressed with yours. It seems like you would enjoy a lively discussion with the Junkster and others here on MFO.