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Descriptive Vs. Predictive Technical Analysis

Technical Analysis (TA) becomes even more popular during times of market turmoil. I find value in both descriptive and predictive TA but both are of little help in forecasting the next market move. For that you may be better off … Continue reading

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Procedure For Generating Weekly P-Dow Indicator Results

The P-Dow indicator has successfully predicted the sign of stock market returns in the past 5 weeks. A blog reader asked me about the procedure I use to generate the indicator values. This is briefly presented below with some comments.

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Capitulation Signal

The Fed gave a signal yesterday to the US stock market to capitulate. Weak hands and especially those that are overleveraged must now take losses and let value investors take over. Below is a chart with potential capitulation levels for … Continue reading

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Is It a Game Or One Step Before The Final Meltdown?

Yesterday was not as bad as it appeared. There was again a flight from high beta to low volatility. This game was played several times since the bottom of 2009. I remain an optimist about the medium-term course of the … Continue reading

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A Simple Explanation Of The Persistence Of The Momentum Anomaly

There is massive literature than documents the persistence of the time-series momentum anomaly in most major asset classes. I abduct in this article a simple explanation of this anomaly and I present some evidence that corroborates it.

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Strategies With High Win Rate And Lower Payoff Ratio

Maintaining a constant profit factor while lowering the payoff ratio requires a strategy with higher win rate. In general, high win rate strategies are more difficult to develop but when combined with lower payoff ratio usually perform better during times … Continue reading

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From Certain V-bottoms to Uncertain Double Bottoms

Most remember the certain V-bottoms in the S&P 500 during 2014. These are now replaced by uncertain double bottoms. There is an area of serious resistance in SPY and more whipsaw should be expected unless fundamentals change.

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