As you know by now, The PPT accurately called the bottom yesterday, flagging an oversold signal that led to a monumental 100 NASDAQS surge. Today’s rally changed the tone of the tape, in that the short sellers felt vulnerable to downside pin action, despite all of the seemingly negative news.
I’m gonna keep this 100 percent numerical, leaving out opinions and emotions.
Here is the raw data of recent PPT oversold signals and how the market responded.
This OS came after a series of oversold signal, most of which proved to be early. The market jerked back and forth, but ultimately hit new highs.
This one nailed the bottom, to the day.
How’d it do on other occasions, you ponder?
A sublime harmony of mathematical precision (SHOMP)
So why haven’t I strictly adhered to the teachings of The PPT algorithms? It’s the mystery of my life. It confounds me on a daily basis. I am not hedging myself here. The data is the data is the data. PPT wins. It gives people an edge by analyzing over 4,000 stocks, ranking them by fundamentals and technicals, taking into account price movements in commodities, treasuries and currencies. It parses out traditional correlations and makes predictions as to when the rubber band will snap back. It’s not your standard, run of the mill, mean reversion tool. It is robust, accurate, and invaluable.
It is my greatest achievement and my biggest detriment wrapped up in one. It’s so hard to remove oneself from the art of stock picking. It’s an addiction that addles me. It calls my name at night. It speaks to me in the day. I know my life would be far better off making macro-calls, using this and ETFs to accomplish my goals. But it’s hard, real hard, to just give up the pipe. I need one more hit. One more parade down the canyon of heroes, then I am done.
Until the next one comes and then I am here, writing a blog at 1:38 am about what could’ve been and what should’ve been, instead of what happened.