New Peerless Buy B20
Created 8/21/2012
(C) 2014 William Schmidt, Ph.D. All rights reserved.
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Buy B20s produced impressive
gains. There have been 22 of the
new Buy B10 signals since 1928. The average gain was 12.5%.
There were no losses. If the DJI was close to the 21-day ma when
the B20 occurred, the odds were 80% that there would be no
paper loss. The signal is based on a simple and logically bullish
concept. I think it should be added to our Peerless arsenal.
August and September B20s were much weaker.
August-Sept Buy B20s are
much weaker.
Date Pct LA/MA IP21 65-day
Gain
Change
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#1 8/2/1933 +.049 .952 -.104 .218
Paper Loss = 2.3%
#2 9/2/1975 +.018 1.01 -.022 -.011
Paper Loss = None
#3 8/31/2007 +.034 1.01 -.007 -.02
Paper Loss = 1.9%
#4 8/17/1934 +.016 1.011 .018 18% below recent high.
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Avg. 2.7%
Clearly dropping these would have helped the average gain
for all Buy B20s.
Buy B20s tells us that over any 8-day period, there were 4 days
where
the ratio of daily NYSE advances to declines was greater than 2.5.
The DJI must not be in a bear market, as defined by:
a) the 65-day Pct. Change is below -.135 or
b) the DJI is more than 17% below its recent highs.
Example:
NYSE NYSE
A/D Ratio
Advances Declines
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8/7/2014 1471
1679
.876
8/8/2014 2397
773
3.101
8/11/2014 2314
834
2.775
8/12/2014 1285
1828
.703
8/13/2014 2341
808
2.897
8/14/2014 2116
1003
2.110
8/15//2014 1534
1575
.974
8/18/2014 2481
692
3.585 Forth A/D Ratio
over 2.5
brings Buy B20
Note again that Buy B20s cannot be
trusted when a bear market is close or
prevails. They may tell us a bottom is near, but by themselves they are not
reliable.
There is one more factor. Avoid using a B20 in an over-bought market,
one which I would define as having a the 65-day Pct. Change is over +.15
Cases:
:
Gain
LA/MA
65-day Pct Change Paper Loss
8/10/1933
+1.8%
1.005
+.264
2.2%
9/21/1938
+13.1%
1.000
+.174
10.5%
BUY B20 GAINS
There have been 22 of the new Buy B10 signals since
1928. The average gain was 12.5%.
They were highest when the LA/MA (DJI close/21-dma)
was between .982 and 1.007.
In these 10 cases, the average gain was 13.6%.
Average gains were next highest in the7 cases where
the LA/MA was above 1.007.
In these cases, the average gain was 12.6%. The
average for the 5 with LA/MAs
below .981 was stilll an impressive 10.2%
But having a high IP21 score
here is quite detrimental to the success of the Buy B20.
In the 4 instances when the IP21 was above +.065, the
Peerlesss gain was only 2.9%.
Apparently, a high IP21 plus very good breadth can
register an oversold market
condition and more of a pull-back is likely. |
Interestingly, very low IP21 readings, below -.065,
did not prevent some very good
Buy B20 gains In the 5 cases where the IP21 was
below -.05, the average gain was 12.0%
Paper Losses
Remarkably, paper losses were
non-existent in 8 of the 10 cases where the Buy B20
occurred with the LA/MA between .982 and
1.007. In the two other cases, the paper
losses were only 0.9% and 1.9%.
Paper losses were much larger in the 12 cases
where the Buy B20 took place with a
LA/MA below .982 or above +1.007.
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Cases: 1929-2014
Table 1: Normal Buy B20s,
where the LA/MA is between .982 and 1.007.
Normal Buy B20s
Date Peerless LA/MA IP21 65-day
Gain Pct Change
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#1 2/2/1939 +3.5% .989 -.161 -.056
Paper loss = none
#2 5/29/1947 +8.9% 1.004 -.002 -.045
Paper loss = 0.8%
#3 7/20/1950 +24.7% .994 -.045 -.035
Paper loss = 1.9%
#4 7/27/1950 +25.7% 1.004 -.012 -.030
Paper loss = none
#5 11/9/1950 +14.0% .996 +.028 +.052
Paper loss = none
#6 1/12/1954 +39.9% 1.001 +.058 +.055
Paper loss = none
#7 7/16/2010 +4.4% .996 -.033 -.093
Paper loss = none
#8 10/5/2011 +10.6% .985 -.034 -.130
Paper loss = none
#9 7/1/ 2013 +3.3% .996 -.057 +.027
Paper loss = none
#10 2/13/2014 +6.0% 1.005 +.016
Paper loss = none
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Number = 10 Avg = +13.6%
8/18/2014 open 1.006 +.023
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Table 2 Valid Buy B20s with High or Low LA/MA:
Cases where LA/MA is unusually high or low,
but not in or on the verge of Bear Market
Low LA/MA Cases not in a Bear Market:
Date Peerless LA/MA IP21 65-day
Gain Pct Change
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#1 8/2/1933 +.049 .952 -.104 .218
Paper Loss = 2.3%
#2 9/28/1938 +.178 .975 +.004 +.024
Paper Loss = None
#3 11/10/1943 +.236 .968 -.204 -.022
Paper loss = 2.3%
#4 11/5/1948 +.01 .962 +.151 -.015
Paper loss = 4.2%
#5 11/12/1948 +.036 .944 +.071 -.047
Paper loss = 4.2%
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Number = 5 Avg = +10.2%
High LA/MA Cases not in a Bear Market:
Date Peerless LA/MA IP21 65-day
Gain Pct Change
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#1 12/7/1943 +.229 1.012 -.14 -.025
Paper Loss = None
#2 12/5/1945 +.032 1.012 +.133 .122
Paper loss = 2.1%
#3 1/22/1958 +.459 1.012 -.011 .02 14% below recent peak
Paper loss = 2.0%
Rslly did stop at upper band.
#4 9/2/1975 +.018 1.01 -.022 -.011
Paper Loss = None
#5 8/31/2007 +.034 1.01 -.007 -.02
Paper Loss = 1.9%
#6 11/1/2011 +.038 1.008 +.21 -.04
Paper loss = 3.7%
#7 10/17/2013 +.074 1.011 -.051 -.007
Paper loss = None
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Number = 7 Avg = +12.6%
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Tables 4 and 5 show the cases occurring when the LA/MA is
outside the normal range and DJI is in a bear market.
These should not be treated as Buy B20s.
Table 4 LA/MA below .982
Date Peerless Gain LA/MA 65-day
Pct Change
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7/24/1931 +.037 .950 -.108 26% below recent peak
10/28/1937 -.051 .967 -.267
4/8/1938 +.048 .976 -.150 42% below recent peak.
4/20/1939 +.068 .975 -.135 19% below recent high.
9/11/1946 +.067 .905 -.184 19% below recent peak
11/6/2008 -.023 .974 -.354 33% below recent high
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No=6 Avg = 2.4%
Table 5
LA/MA is above 1.007
Date Peerless Gain LA/MA 65-day
Pct Change
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11/16/1932 -.005 1.008 .001 19% below recent high.
8/17/1934 +.016 1.011 -.018 18% below recent high.
11/22/1935 +.079 1.01 +.144 29% below recent high.
10/17/1946 +.069 1.01 -.151 19% below recent peak.
12/4/1946 +.078 1.009 -.107 20% below recent peak.
6/5/1970 +.016 1.009 -.118 24% below recent peak.
10/16/1974 +.02 1.012 -.17 26% below recent peak
1/7/2008 -.071 1.008 -.151 35% below recent high
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No=8 Avg = 2.5%