Monday, June 22, 2015

Appreciative Inquiry and More Views to Kick Off the Market Week

*  Above we see the number of stocks listed on the NYSE that are giving buy signals minus sell signals for the ADX indicator (raw data from Stock Charts).  The number of buy signals correlate with the number of sell signals by -.52.  That's significant to be sure, as we'd expect, but is far from a perfect negative correlation.  Indeed, when we look at buy signals vs. sell signals independently, it's the number of buy signals that ends up having the greatest relevance for short-term price movement.  Specifically, when the number of buy signals is in its lowest quartile, the next two days in SPY average a healthy gain of +.46%.  All other occasions average a next two-day loss of -.07%.  It's been when we've had the least strength that swing returns have been most favorable.  Summing buy and sell signals across technical systems for all stocks has been a useful way of tracking strength and weakness in the broad stock market.

What is appreciative inquiry and why is it crucial to your development as a trader?

The complicated world of social security payouts.  Consistently excellent perspectives from The Mathematical Investor.

*  A simple portfolio that has ridden recent trends quite well and other excellent perspectives from Abnormal Returns.

Applying a moving average trading system to your returns rather than to price itself appears to bring some performance benefits.

Very useful overview of economic data and more from A Dash of Insight. 

Favorite reads from Steve Burns and New Trader U.

Have an excellent week!