Mark Bates

V54 Released – Added Breadth Analysis to Model

by

I have added a check on Breadth to the base algorithm.  This is looking at the number of stocks reaching new highs versus new lows, the number of stocks advancing versus declining, and the number of stocks above or below their 21dma.  It looks at this data across the S&P100 (very large caps), S&P500, S&P400 (midcaps), and S&P600 (small caps).  Version 54 performs with a higher RAR and higher Win Percentage than V53.  read more

15%+15%+15%-15% = 6%

by

One of the most eye-opening aspects of investing is the impact of market declines on your total return.  If you make 15% in year 1, another 15% in year 2, another 15% in year 3, and then you lose 15% in year 4, you earn….6% annual return.  That one year of 15% loss cuts your four year annualized return to just 6%. read more

V53 Model Refinement Using Fidelity Economic Cycle Analysis

by

The linking of economic cycles with the technical investing algorithms is an important part of our ETF algorithm.  The model has been updated to Version 53 to include refined economic criteria.

 

In Version 53 the trade entry logic was further refined using an analysis that was conducted by Fidelity Investments and summarized in the table below.  As a result of this refinement the backtesting results (1/1/2003 – current period for our target ETF securities) for the algorithm have improved slightly: read more

George Dagnino Market Opinion January 27

by

In a post in SeekingAlpha on January 27th of this year (https://seekingalpha.com/article/4401277-market-and-earning-cycles-point-to-pause-in-2022 George Dagino wrote:

 

“The last bottom of the business cycle took place in March 2020. Growth should therefore show a peak in 2022, assuming the upward leg of the cycle is two years. This should be also the time growth in earnings will begin to slow down. read more

AAII Guidance on Placing Stock Orders

by

The following is guidance from the American Association of Individual Investors about how buy and sell orders should be placed:

  • Market orders are not used.  Instead, if the quoted bid-ask spread is less than 2% (ask price minus bid price, divided by ask price), place a limit order at the ask price for a buy and at the bid price for a sell.  If the bid-ask spread is more than 2%, try to place a limit order between the bid and ask prices to keep transaction costs low.  If necessary, build a position gradually.  With zero commissions, it is often better to place partial orders than to try to establish a large position all at once.  Be patient.
  • The average daily dollar volume should be at least 10x the amount needed for your position.  This will ensure liquidity to get in and out of the position, even if you need to grow the position gradually and sell gradually.  This will result in a varying number of qualifying stocks for each investor.
    • read more