Good morning Allen, Re: Market Risk Indicator results............
Since the start of 1982 there have been 15 bearish signals and 17
bullish signals generated by my data. I decided that if the sign lasted
just one week it was more "noise" than "signal" so eliminated those. The
totals above are the results of at least 2 consecutive weeks of either
bullish or bearish signals.
I then took the starting date's Index value and counted out 4 weeks, 3
months, 6 months, 9 months and 12 months to see where the indexes were
after the initial signal. I then compared the percentage change to the
average change for those indexes for the same time frame since 1982. For
instance, of the bullish signals at the 3 month time we see the average
NASDAQ change being 10.8% vs 3.09% average gain.
If the change seen at each time interval for each event was a beneficial
call, I scored it as a positive call. The % Success column represents
how many of the calls were positive for each time frame. The "sweet
spot" values scored the highest success percentage. At 3 months from a
Bullish signal 76% of the time it proved to be fruitful (better than
average returns).
There were some embarrassingly bad calls along the way, but on average
the data has been useful and better than flipping a coin.
Buy from the Scared; Sell to the Greedy.....
