Investment Strategies / Mechanical Investing
No. of Recommendations: 2
Can anyone provide any guidance on how to calculate the three BCC aspects without GTR1?
Note: I'm probably the one who broke it as I finally sat down to learn it just before it went south.
Sorry Robbie!
(and seriously, if there is any way to materially support Robbie, I hope this becomes known)
No. of Recommendations: 12
Click on "Mechanical Investing FAQ" (at the bottom of every post), and then "Timing Methods".
Recent signal changes were:
20230201 DBE changed to Bull
20230221 NH/NL changed to Bear
20230308 SMA changed to Bull
DBE is
https://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=1&...If the most recent move in the upper blue line is up, DBE is Bull.
If the most recent move in the upper blue line is down, DBE is Bear.
If the upper blue line is level, there is no change in DBE.
NH/NL is close to the 9-day moving average of
https://www.barchart.com/stocks/quotes/$...The Simple Moving Average (SMA) Slope identifies whether the intermediate trend of the market is up or down.
1) Take the 40 week moving average (200 day) of the S&P 500
2) If this week's figure is better than that of 2 weeks ago, then buy (or hold, if in already).
3) If less, sell or wait it out.
No. of Recommendations: 11
Here are the three Stockcharts that I use when GTR1 is not available. SMA and DBE can be recreated directly on Stockcharts. NHNL cannot, because Highs and Lows are counted differently by different data vendors. Robbie discussed this periodically on the old board. I believe the difference is immaterial, but there is no way to check for sure. If, like me, your interest is in periods when BCC > 0, that is true now, regardless of NHNL.
SMA
https://schrts.co/kIJcRwNJDEB
https://schrts.co/tHaaIuSJNHNL
https://schrts.co/qzUcXJNIAs of now SMA and DBE are bullish, NHNL (as represented by Stockcharts) bearish. Thus BCC = 5.
Baltassar
No. of Recommendations: 0
No. of Recommendations: 6
The NHNL indicator in GTR1 uses the 9d Weighted Moving Average. If the 9d Weighted Moving Average is > 0, the indicator is bullish.
Stockcharts does not include weighted moving average as an indicator. Exponential moving average is close, but not identical. Barcharts includes both. You can see the difference here:
https://www.barchart.com/stocks/quotes/$...As of today WMA and EMA are both slightly negative.
The issue of replicability of NHNL is not simply how the moving average is calculated, however. It also has to do with how New Highs and New Lows are counted. As I say, this came in for discussion on the old board, and can probably be found by searching. In the end, however, there is no getting away from the fact that GTR1's way of counting new highs and new lows is not replicated by readily available public charting or data services. This is a matter in which small variances are common. Stockcharts and Barcharts do not agree precisely either. From my perspective such small differences do not matter; a matter of opinion and use, obviously.
Baltassar
No. of Recommendations: 0
Thank you for your explanation - much appreciated!
No. of Recommendations: 1
Thank you very much for the reply and explanation!
No. of Recommendations: 3
No. of Recommendations: 8
By the tiniest of margins, but yes.
On the other hand, DBE takes another step up.
I don't second-guess mechanical indicators. But if there's cause for concern about the general state of the market, it's lack of breadth, rather than performance of top-heavy indices like the S&P or Nasdaq. Almost 60% of QQQ's value is accounted for by its ten largest holdings. If you look at NHNL (Stockcharts version) over the last three years, you can see that participation has been narrowing for quite a while.
https://schrts.co/qmHZgHkHOther similar measures tell the same story.
Baltassar
No. of Recommendations: 5
to build on "participation has been narrowing for quite a while..." - basically, it is increasingly difficult to pick individual stocks expecting a positive return.
The big money - 401k/403b/retirement contributions, sovereign wealth funds - that drives markets - is piling into cap-weighted index funds which in turn own those 10 or 20 megacap tech or related stocks: self-sustaining engine. Those stocks have become the "black hole" of the market, sucking in increasing amounts of money from other investment options.
Diversification is important for risk reduction but increasingly is outperformed by SPY and QQQ because of that.
No. of Recommendations: 2
FlyingCircus wrote:
cap-weighted index funds ... have become the "black hole" of the market, sucking in increasing amounts of money from other investment options.
If there is a perennial institutional "buy" under cap-weighted large cap funds in particular, might this mean that the anticipated outperformance of equal-weight alternatives is mistaken, however true it may have been in the past?
The perennial institutional "buy" is not new, but it has gotten larger with the passage of time. At first glance it seems reasonable that it might gradually narrow or even eliminate the advantage of equal-weight alternatives, at least in the diversified large-cap space represented by SPY and QQQ.
I have found that the first glance is not to be trusted when it comes to investing, however. The superiority of the EW fund is that it avoids the often brutal mean reversion that routinely befalls the overbought behemoths at the top of cap-weighted alternatives. This must remain true regardless. But off hand I can see no reason why consistent buying pressure that is indifferent to this advantage might not erode it on the margin, to the point where it isn't worth pursuing.
Baltassar
No. of Recommendations: 0
I would guess that any equal weight fund would have lower beta than it's cap weighted brethren ,thus making equal withdrawal less problematic.
J,
No. of Recommendations: 0
Does it appear to others that BCC indicators are turning Bullish this week?
No. of Recommendations: 1
Yes, the versions of BCC that I'm using are turning positive.
No. of Recommendations: 9
My reading:
DBE(99) has been positive since mid-May, and ticked up again this week. It cannot go negative until sometime in October or early November.
SMA(200) is infinitesimally negative at today's close.
NHNL(9d) is positive on both Stockcharts and Barcharts.
Baltassar
No. of Recommendations: 5
My Slightly different criteria than BCC
DBE: No New 99 Intraday High for 5m ( High/Low Channel - Intraday High uptick )
As of 02-Jun-23
Index: Status Signal Date 99d New High
SP600 (IJR) Daily Bullish 31-Jan-23 03-Feb-23
SP400 (MDY) Daily Bullish 26-Jan-23 02-Feb-23
SP500EW (RSP) Daily Bullish 26-Jan-23 02-Feb-23
SP1500 (ITOT) Daily Bullish 01-Feb-23 02-Jun-23
SP500 (.SPX) Daily Bullish 01-Feb-23 02-Jun-23
----- ----- ----- -----
SP500 (SPY) Weekly Bullish 03-Feb-23 02-Jun-23
GD_
No. of Recommendations: 11
As of today's close traditional BCC = 7 [first time since 30 March 2022]
DBE(99) $SPX 4322.62 [New intraday high]
SMA(200) SMA(200) = 3976.77
SMA(200-11) = 3975.83
NHNL(9d) EMA(9d) = 18.45 [Stockcharts]
WMA(9d) = 20.93 [Barcharts]
Baltassar
