iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,423 Blog Posts

Talking My Own Book: So How Accurate is The PPT’s Oversold Signal?

I know some of you call into question the algorithms touted here, almost on a daily basis. You mumble to yourself “how accurate, really, is this stupid signal he is always yapping about?”

First of all, what is a Hybrid Oversold Signal?

The word “hybrid” represents the blend of both technical and fundamental data. Every stock inside of The PPT is measured by 5 technical and fundamental factors, thew blended together using my ‘top secret’ formula to derive a hybrid score. When that score is low enough, it triggers and OVERSOLD signal. As soon as the signal is triggered, it is tracked for a period of 10 trading days and the results are displayed, for every stock and ETF in the system. Well, for ETFs, since they don’t have fundamentals, only the technical score is tracked.

The overall hybrid, essentially, is a composite of all of the scores. When the selling pressure goes ‘full retard’, more often than not, the overall hybrid triggers OS, due to the inherent oversold nature of the constituent securities.

The overall hybrid oversold and overbought signals are tracked for accuracy and the % gain or loss over the 10 day period it is tracked.

Here are the results over 3,6,12 and 36 month periods.

3 month
3
6 month
6
12 month
12
36 month
36

I am sure it’s just an odd coincidence.

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18 comments

  1. Mister Jinx

    When is the signal calculated and published? I.e., is it published prior to the close of trading, or later that evening, on a daily basis?

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    • The Fly

      It is published every 15 mins. However, this data is contingent upon the score closing at that level. There have been numerous OS signals, on an intra-day level, that haven’t been tracked. But I know the overwhelming majority of them have been spot on.

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  2. ripper

    no one can rely on signals when it comes to trading/investing.

    gut feel with a heavy poriton of research and active watching is required.

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    • The Fly

      Right.

      Lets just make believe gut feelings is what wall st uses in this day and age.

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    • MX2101

      Ripper, why would you not accept (or pay) for an edge? Run the numbers. Unless you plan to make just three trades a year, all of them profitable, brilliant, gut and instinct based, just a slightly higher win percentage can make the difference between success and failure. If you trade 50, 100, 250 times a year, you need every edge possible.

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      • MX2101

        More:

        Run Monte Carlo style simulations on various win percentages and bet sizes. For each parameter set, average the results for ten or more period samples of the endless stream of results.

        It may be shocking, but ultimately not surprising what happens if you sit at the slot machine too long, on the wrong side of the edge.

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        • ripper

          my edge lies in finding turnaround plays and making 10X the return of my money. I dont wanna trade in and out of names for 3 to 10 percent.

          @FLY: wall street uses computers for HFT not to create weird signals.

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  3. Munch The Greatest

    There is no holy grail, Fly yo!

    Wake up!

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  4. Marc David

    I love the owl! And the PPT has been so right over the last 3 years, I am still unable to truly take the risk necessary because I still think it’s too good to be true. Yet it’s nailed the bottom every time for 3 straight years, QE or not.

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  5. xxxHuggieBearxxx
    xxxHuggieBearxxx

    We are in the distribution phase. This will not be a market meltdown like before. It will be an orderly, 12-24 month decline where the market goes up as often as it goes down, but it will end much lower.

    The situation has changed dramatically from a macro perspective. The near term “now” macro measures might look ok — jobs, retail sales, etc. But, the “forward looking” macro determinants, those that have been driving this five year rally, have changed dramatically. Primarily, a reduction in liquidity from the fed and chinese CB. These factors were enough to overcome the most calamitous collapse in history when they had the spigots open, and now that the spigots are closing nothing will be able to overcome their impact to the downside.

    The recent market action shows that the “smart money” (forgive me for using the term) understands this…again, it will not happen quickly. They will sneak out of the back door on the good days, when the econ numbers look good. But understand, they are already looking ahead at what these policy changes inevitably mean, and positioning accordingly.

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    • jbran

      You have painted a great wall of worry which this market will climb. That does not mean we will not see repricing where values have gotten out of line. The 1st three years from 3/09 equities moved together, 52 wk. highs etc. I do not see that anymore some stocks have corrected 25% and some have not. We have onshoreing of jobs due to higher wages in Asia and cheap energy here. We have technology moving all sectors forward. the boomers are slowly moving out of the work force, I 4 one, making way for those who seek and are skilled. Buy quality when it is sold off or just by the index. There is an untold story of “progress” going on in this country. The market takes patience, a rare commodity on the street of dreams.

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      • xxxHuggieBearxxx
        xxxHuggieBearxxx

        Fair point….i don’t disagree, repricing probably does represent a good long term buying opportunity.

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    • Po Pimp

      now that the spigots are closing nothing will be able to overcome their impact to the downside.

      Just open up the spigots again if it comes to that. No need to over-complicate things.

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  6. donkey arbitrageur
    donkey arbitrageur

    How accurate, really, is this stupid signal he is always yapping about?

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  7. FRANK

    Hey Fly is there anyway to test out the PPT for a day or two? I am really interested in checking it out.

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