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Materials
for February 2015 Tiger Software Meeting
(C) 2015 William Schmidt, Ph.D. www.tigersoft.com
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Crude Oil Bottoms.
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Reversals by DJI
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Hi, Tigers!
Let's start February right.
Peerless says the market should go higher with its Buy B9
and rising NYSE A/D Line. It is rare for the market to
turn down without the A/D Line blatantly failing to
keep up with the DJI's advance. And when there is
no such divergence, usually we see a Head/Shoulders
top or the DJI rallies above the 2.1% band with a Accum.
Index negative. That almost happened in December,
but it did not.
February is an up-month 59.2% of the time since 1965.
It averages 0.5%. But in years before a Presidential
Election, in the 21-days after Feb 8th, the DJI is up
83.3% of the time and rises 3.4% on average.
We know years before a Presidential Election, like 2015,
are quite bullish. They have averaged 14%-15% gains. Why?
Because Washington politicians want to keep their cushy jobs
and most voters keep score for at least a couple of years.
But what if the Fed suddenly
raised rates because wages
are rising faster than productivity and Job Growth is
now expanding too fast? We must keep an eye on
lots of interest rates (TNX), World markets (Foreign ETFs),
Crude Oil and of course Gold. A big rise by Gold very
often leads to Fed tightening and a market top.
The Jobs numbers were so good, many traders thinks this
guarantees the Fed will raise rates this Summer. That
expectation will dampen the markets ability to rise much
after April, I would think. This is important. A rising Dollar
makes certain groups winners in the stock market
and certain groups losers.
 |
As you know, Peerless is on a Buy B9. Historically, its avg gain
on the DJI is +10% at the time of the of the next Peerless Sell.
Median gain is over 7%. January B9s are particularly bullish
as are B9s in the third year of the -year Presidential cycle.
BREAKDOWN of BUY B9 TRADES: 1929-2014
=====================================
No. Date Peerless DJI Pct Paper
Signal Gain Loss
==========================================================
1 19340910 B9 89.3 .038 .029
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2 19341220 B9 99.6 .044 None
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3 19350531 B9 110.64 .198 None
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4 19351213 B9 140.2 .114 .009
-----------------------------------------------------------------------
5 19431108 B9 131.7 .245 .016
-----------------------------------------------------------------------
6 19431117 B9 130.2 .26 .004
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7 19431126 B9 131.3 .249 .013
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8 19440907 B9 143.6 .142 .004
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9 19440914 B9 142.9 .148 None
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10 19450326 B8 152.3 .077 None
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11 19460225 B9 187.2 .135 .006
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12 19461009 B9 163.1 .126 None
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13 19480920 B9 177.4 .07 .007
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14 19481122 B9 176.3 .022 .029
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15 19481129 B9 172 .048 .004
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16 19481201 B9 173.2 .040 None
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17 19501205 B9 225.4 .15 .003
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18 19550117 B9 388.2 .207 None
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19 19581125 B9 540.5 .203 None
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20 19661201 B9 789.95 .124 .005
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21 19670412 B9 844.65 .051 None
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22 19670519 B9 874.55 .063 .031
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23 19740207 B9 828.46 .033 .03
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24 19741009 B9 631.02 .038 None
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25 19750528 B9 817.04 .058 .002
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26 19751209 B9 824.15 .225 None
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27 19761005 B9 966.76 .018 .046
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28 19771206 B9 806.91 -.017 .017
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29 19780223 B9 750.95 .154 None
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30 19781218 B9 787.51 .125 None
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31 19790206 B9 822.85 .077 .008
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32 19801028 B9 932.59 .058 .016
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33 19811023 B9 837.99 .04 .008
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34 19820930 B9 896.25 .179 None
--------------------------------------------------------------- -------
35 19821123 B9 990.99 .067 None
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36 19830124 B9 1030.17 .207 None
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37 19860122 B9 1502.29 .215 None
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38 19860407 B9 1735.51 .052 None
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39 19860711 B9 1821.43 .008 .029
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40 19861118 B9 1817.21 .324 None
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41 19880108 B9 1911.31 .059 None
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42 19880122 B9 1903.51 .063 None
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43 19880325 B9 1978.95 .056 None
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44 19930921 B9 3537.23 .122 None
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45 19960110 B9 5032.94 .103 None
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46 19960410 B9 5485.98 .048 None
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47 19960507 B9 5420.95 .06 None
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48 19961213 B9 6304.87 .087 .005
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49 19970911 B9 7660.98 .034 None
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50 19971219 B9 7756.29 .183 .012
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51 19981001 B9 7632.53 .459 None
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52 19990524 B9 10654.67 .045 .011
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53 20001124 B9 10470.23 .042 .014
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54 20001220 B9 10318.93 .058 None
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55 20010323 B9 9504.78 .183 None
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56 20011101 B9 9263.9 .092 None
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57 20020918 B9 8172.45 .074 .121
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58 20021209 B9 8473.41 .035 .02
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59 20021216 B9 8627.4 .017 .038
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60 20041014 B9 9894.45 .103 .014
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61 20041022 B9 9757.81 .118 None
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62 20050624 B9 10297.84 .124 .008
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63 20060718 B9 10799.23 .148 None
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64 20081223 B9 8419.49 .063 None
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65 20111121 B9 11547.31 .048 .028
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66 20131007 B9 14936.24 .105 .01
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Total N0.= 64 .108 .009
Returns by Size of Gain
-----------------------
No. Pct.of Total
=>.10 30 .455
=>.05 - <.10 18 .273
=>.02 - <.05 14 .212
=>0 - <.02 3 .045
<0 1 .015
--------------------------------------
Total 66 1.0 (100%)
Returns by Year
---------------
No. Avg.Gain Pct.of Total
Pres. Election Years 20 .07 .303
Year after Pres.El.Yr. 10 .094 .152
Mid-Term Election Yr. 22 .124 .333
Year before Pres.El.Yr. 14 .146 .212
----------------------------------------------------------------------
Total 66 .108 1.0 (100%)
Returns by Month
----------------
No. Avg.Gain Pct.of Total
January 6 .142 .091
February 4 .099 .061
March 3 .103 .045
April 3 .05 .045
May 5 .084 .076
June 1 .123 .015
July 2 .077 .030
August 0 0 0
September 8 .1 .121
October 9 .118 .136
November 11 .145 .167
December 14 .089 .212
--------------------------------------------------------
Total 66 .108 1.0 (100%)
Returns by Day of Month
-----------------------
No. Avg.Gain Pct.of Total
-------------------------------------------------------
1-10 22 .101 .333
11-20 20 .111 .303
21-31 24 .112 .364
-------------------------------------------------------
Total 66 .108 1.0 (100%)
|
The A/D Line is pointing up. 10-year rates are way below 2%.
What could possibly go wrong? US Austerity? Terror? Greek
default of govt. debts to world's bankers, including those in
US? Rise in rates? Euro meltdown?
A rising A/D Line did not prevent the bull market of 1975-1976
from turning into a bear market for 15 months. The FED's
high rates, higher gasoline prices and Jimmy Carter's
federal budget austerity caused this. Or the DJI from falling 17%
from January to July 1984.
---> We are now seeing increasing draw-downs if we wait for the
Closing Power to "clinch" Peerless Buys on the key ETFS. Same
thing with waiting for IDOSC, CCI, 5-day ANROC turns up. Best to
just act on Peerless Buy and use a stop 3.5% below the Buy B9 signal
or any well-tested horizonatal support below the 200-day ma support.
See the paper losses above. SPY offered a perfect well-tested
support to use at its still rising 200-day ma.
---> The DJIA has been in a trading ranges recently. Lengthy DJI trading ranges
this long
and much longer have occurred many times in the past. The best examples are:
Flat Trading Ranges and Outcomes:
1928-2015
length
----------------------------------------------------
1929 6 months' 25% advance, then utter collapse.
1939-1940 8.5 months 25% bear market.
1956-1957 19 months 19.5% decline
1961-1962 9 months 26% decline
1972-1973 8 months 15% advance and long bear market.
1976-1977 11 months bear market for 15 months.
1980-1981 9 months bear market for 15 months.
1986-1987 10 months 40% advance and October 87 Crash.
2013 6 months 10% advance and zig-zags higher.
How might we TRADE major market ETFs within this range, while it lasts. In the past,
I have emphasized the
Hourly DJI,
Closing
Power trend-breaks especially after CP NCs.
automatic
5-day Stochastic Buys/Sells,
CCI
6-day
Inverted Traders' Index.
A/D Line
short term trends.
Good
reversals from support begin with 3:1 advances to
declines ratio on NYSE
---> I want now to introduce at the meeting New TigerSoft charts.
These charts show the TigerSoft 6-Month Price, Volume,
5-day mvg.avgs and bands. Let me show some ways to trade
the more volatile ETFs, like NUGT, with the new 6-month charts
and the AROC (annualized Rate of Change) of the 5-day ma.
---> The new charts let you see resistance, support and breakout
levels more clearly, I think you will agree.
---> We want to watch for failures of daily volume to confirm
daily advances to the upper bands.
---> We should consider using two sets of Buy orders, one
at the lesser lower band and one at the lower band. These
targets are shown on the new six month price chart.
With Peerless on a Buy, how can we find proditable long-side trades
and also find good short sales to hedge with. Watch the CLosing Power
for NCs, trend-breaks and the 65-dma, too. Professionals usually know first.
---> In newer bull markets and when the ratio of NASDAQ new highs
to new lows is greater than the ratio of NYSE new highs to new lows,
we like to find Tiger B10s, B12, B17s, B20s, B24s, B25s, B26s. These show
insider buying and confirming relative strength.
---> What are deeply over-sold stocks that break their Closing Power?
See how Closing Power has called
many Crude Oil bottoms. We do
our homework on the Hotline to make it payoff for subscribers.
--> What are deeply over-sold stocks showing simple price trend-breaks?
---> What are stocks showing new Stochastic short-term Buys at support
and showing improving internals? Tiger easily lets you find these stocks
using the Flaging of Stochastic-Buys and Sells.
---> What are the strongest trending stocks now?
Stocks up the most over
a specified time period.
Use Old Power Ranking for x number of days.
Bullish MAXCPs
Power Rank the MAXCPs.
Weekly New Highs
Run weekly flag program and look for recent weekly B12s.
Which are the some of the stocks that have gone the longest
without a correction below their 65-dma? Or even their 21-day ma.
Use HISTB19 flags. But be careful if they break their Closing Power
uptrend or form head/shoulders, especially if they are over-extended.
---> Which are the stocks now showing the biggest recent bulges of insider and
Professional buying? These often lead to rallies that last, at least, another
6 months. Use the Downloads from TigerSoft - HIGHIP21 (Current high
IP21) and ACCUMVER (past IP21s). The first group shows intense insider
Buying right from a screeniong of all 6000 stocks? Look at the VHIP21
high Accum low priced stocks. From these we want red high volume
breakouts above flat resistance. Ideally, they will also have gaps
and multiple bulges of intense Accum.
---> The big jump in jobs would seem to bring closer the date when the
Fed will raise rates, even though the Dollar is already very strong. The Big
Banks love the prospects of an even stronger Dollar. Trade FAS on the upside.
---> Over-extended stocks eventually top out. All this sounds
easy enough, but
let's look back at how strongly uptrending stocks in the past have topped out,
even when they started off the year in powerful uptrends. See new books
on Explosive Super Stocks and Killer Short Sales. Look at the SP-500 stocks
down the most for the 100 days.
----> And if we want to hedge by selling short some of the most BEARISH
MINCP stocks, how long do we need to wait for the bullish "January effect"
on weak stocks to wear off?
-
Come and join us this Saturday. We'll make it worth your while.
Free San Diego Tiger Users' Group Meeting
Saturday,
Feburary. 7th 12:45 - La Jolla Coco's
There'll be plenty to talk about. I hope you can come.
It should be real fun to bring all our experience and knowledge
together to solve some of the key questions we all have about
investment survival in an age when Wall Street seems to
have so many advantages.
See you Saturday. Best wishes to all.
Bill
