Model update for today's market (8/1): A Buying opportunity?

smallwonder · Newbie Joined: 24 Jul 2005 Posts: 15

Today's buy model number is 2.13 (was 1.49 yesterday), and the sell model number is 4.6 (was 4.1 yesterday). WE HAVE A BUY SIGNAL FOR TODAY (a qualified buy signal requires positive buy model number for two consecutive days, and one of them greater than 1.5).

So, is this a buying opportunity? It does not rule out any short term selling from here. However, if that happens, it will be a buying opportunity. It has a very high probability that the SP500 will be higher when the next sell signal is issued from the model.

HenryTo · Posted: Tue Aug 02, 2005 8:55 pm Post subject: not too surprised

Smallwonder,

Please do keep this up - we all appreciate your work. I would not be too surprised by a further extension at this point. Just makes the inevitable correction (whenever it comes) that much harder. Nothing like some good ol' volatility/basic trend for those that have been missing it for the last 18 months.

Best,

Henry

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

I thought all my updates are forward testing data points.

Smallwonder,

But of course they are. I was just being cute because of the market action today immediately following your "buy" signal.

I'm pretty sure you post model output for the same reason I do - public forward testing where the results can be verified by all. I've gone out a limb a few times and been wrong and right at different times. Thankfully you only have to be right a little more often then you're wrong to win at this ...
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smallwonder · Newbie Joined: 24 Jul 2005 Posts: 15

Henry,

I am also puzzeled by the model prediction, given the extention this up leg has been. However, I have to report the result, whatever it is. I think what the model says is that we may still have some more upward move left, and I don't know when this is going to end. I am counting on the model to give me a timely selling signal.

Bill,

I thought all my updates are forward testing data points.

Smallwonder

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

smallwonder,

When you are forward testing a new model, that is what I call a good data point.
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Given the fairly weak "better than average" signal from the EPCR model (monthly), the medium-strength "better than average" signal from the quarterly model, and the "safe" signal from the bust model, I don't see this as a bad time at all to buy.

If you see a stock that makes sense, by all means, buy it.

If you're an index investor, given the above signals I think the upside and downside are slightly better than average, but not good enough to use leverage IMO.

Yesterday was a decent day for the S&P so if you expect some retrenchment maybe you buy today?

I have to develop hard "sell" and "buy" signals when I'm backtesting to measure alpha, but in real time I'd rather assess my odds based on the models and have the flexibility to use judgement.
_________________
I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

HenryTo · Posted: Mon Aug 01, 2005 9:52 pm Post subject:

smallwonder,

Thanks again for the update! At this point, I am still skeptical - we will just have to wait until the inevitable decline to see just how much selling pressure there is out there. Markets can always just turn on a dime.

Best,

Henry