The Power Dip model portfolio took a beating over the past two days. A bounce is needed soon or it will be very ugly for the strategy. The spreadsheet has been updated with all of the positions and Wednesday’s closing prices.
[[CRTX]] stopped out on Wednesday, and 99 Cents Only Stores [[NDN]] has met the exit requirements to be sold on Thursday’s open.
This will leave room for two more positions. Accordingly, Savient Pharmaceuticals, Inc. [[SVNT]] and [[ARMH]] will be purchased on the open.
There are two additional setups that the portfolio does not have room for: Palm, Inc. [[PALM]] and Jack Henry & Associates, Inc. [[JKHY]] .
Here’s to a bounce!!!
Wood, I just saw your post at Denninger. That was good – really – not being sarcastic here. There’s indeed minions of karl but that is not why I am here. Karl is a pretty good scalper and that is why most TA not work or will be vulnerable, aped upon disclosure, such as yours. Having said that, I would often think of Karl as a person who likes to plagiarize others, poorly, as he rushed to join the topics and drive out whoever is in the discussion out.
Did you check the golden cross against bear markets and bull markets?
It’s cool that some of our picks cross.
Dave, if you would like to quantify “bull market” and then “bear market” I will try and find the time to look at the results.
Honestly, I’ve tested this 6 ways from Sunday. What are you expecting it to show?
Is a falling 200dsma, with the 50 dsma beneath it, not already a bear market?
Anyway, quantify those for me and I’ll take a look at it.
fwiw, asimov from denninger’s site did more digging on the 50/200 stuff and concluded that the only losing trades were when the 50 was rising and the 200 falling – what it’s doing now. There’s only like one or two data points though. Not enough for me to conclude anything.
KD’s site is filled with good traders that do their own thing. It’s not a zombie army, at least not in the active trading and technical sections. The rest of the site has moonbats galore. Who cares though. It takes all kinds.
this is a interesting market Wood…i think it’s just a plain old sideways correction but the key will be how long will the “hands” hold….if too many weak hands fold, we could drop but volume isn’t all that great…I’m buying stuff now on scale with 6 month time horizon (which is rather long for me….betting on a big 3rd quarter)
Any market views?
Lata man
Krusty, someone else asked me about Asimov’s research on the Denninger is Incorrect Post comments section. Here is what I wrote:
“Junkyard, Asimov has conducted himself with dignity and is the only person I that I am aware of on Denninger’s entire Palace of Fascism that bothered to test this for himself. Therefore, I did not challenge his results, even though they are incorrect.
As I began to go through Asimov’s spreadsheet, I found a rather glaring error, within the first 20 or 30 fields. That was enough for me, and so I did not bother to check the entire sheet. Obviously you did not bother to check the sheet, but rather blindly trusted the results. Seems like a lot of Denninger’s zombies comport themselves in that fashion.
Also, Asimov’s results show an overall LOSS on trades taken with a falling 200dsma. Look, you don’t like my results, my methodology, then fine. However, this has been tested by many many different researchers, and none found that the falling 200dsma created an overall loss.
Here is a quote from the Merrill Lynch report on the Golden Cross:
“In the Merrill Lynch report prepared by Mary Ann Bartels, it continues to distinguish between golden crosses that happen with a downward long term moving average and those when the long term moving average is rising:
Of the 42 Golden Cross signals triggered since 1928, 20 have occurred with the 200-day moving average in a declining trend or lower than it was 30 trading sessions ago. These signals on average have generated 12-month returns of 13.3%.
The remaining 22 signals occurred when the 200-day moving average was rising or higher than it was 30 trading sessions ago. The returns for these signals were much lower and on average generated 12-month returns of 5.7%.”
Notice Merrill’s research is consistent with mine, and exactly opposite of Denninger’s statement in the quote at the beginning of this post.
So to be clear, there are some serious errors either with Asimov’s spreadsheet, data, or methodology. I’m not sure which one.”
Nice find, i.e. ML’s confirmation of your research.
VCU, greetings dude.
This is a challenging market, and I think it will likely stay this way for 5-8 years, with some small periods/phases when it is easier to trade it.
I try not to look forward more than 1-3 days at a time, and a month at the most.
My crystal ball says we trade lower throughout July.
Err, I said that the only losing setup was rising 50 vs falling 200. And that there’s only a few instances of it.. This doesn’t contradict your findings at all, as far as I can tell. I have no idea why this is so important to you. Are you trading it? If so I think you are on the wrong side. If you aren’t trading it then it’s sorta weird to get so emotional about it. You don’t like his site that’s fine. You’d fit right in though. There’s truly some great traders in the areas you can’t see. No worries. Keep doing your thing.
Krusty, Asimov’s research showed that the rising 50 and falling 200 lost money. Unless he has revised his work, here is the quote from his post on the thread:
“If you’d bought every golden cross and sold on the next death cross, you’d have seen $7,678.12 of price improvement.
If you’d bought every golden cross when the 200 and 50 were trending up then sold the next death cross, you’d have seen $7,606.48 of price improvement. (Yes, just $71.64 difference from buying them all.)
If you’d gone all wierdo, and bought every golden cross where the 200 was down and the 50 was up, selling on the next death cross, you’d have seen a total DROP of $8,819.24.
If you’d sold every death cross and closed it out on the next golden cross, you’d have seen $535.62 of price improvement.
If you’d sold every death cross when the 200 and 50 were trending down, closing it out on the next golden cross, you’d have seen $2,854.68 of price improvement.
If you did the wierdo thing again, and sold every death cross when the 200 was up and the 50 down then closing on the next golden cross you’d have seen $2,423.76 of price improvement.”
Like I said, maybe he revised it, but as of a couple of days ago his research showed the rising 50/falling 200 LOST money overall.
The Golden Cross is not at all important to me. I’m not a long-term trader. I’m a swing trader.
What is important to me is that Denninger calls out Kneale, like he is some super-star nobel laureate economist, and yet in his own words states something that was completely and 100% incorrect. I have a problem with that, for many reasons.
Good to hear there are some good traders there.
Right, that’s what I said (three times now, lol). The only time buying the cross lost money was when it the 200 was declining and the 50 rising. That was the takeaway from Asimov’s research. Every other time it was a good trade, sometimes really really really good, even when they were both falling.
There’s only a few data points that created the losing trades though, so it’s not statistically significant. We have our eye on the 20week/50week crosses for bull/bear delineation anyways. Backtest that one if you are bored. It’s money, especially if you filter out headfakes buy requiring a 1% threshold after the cross before taking the trade.
I could give two shits about KD vs. Kneale. KD is a damn good trader. Everything else is just stuff you gotta take with a grain of salt. He says so much shit every day that he’s gonna mess up a lot. Plus he likes to argue. Not exactly a unique trait among bloggers. I hope you come back and post there every now and then.
Krusty, you are missing the point. Wood’s spreadsheet shows that you MAKE money when you buy the golden cross while the 200 dsma is falling. Asimov said the exact opposite.
You keep repeating yourself, saying the same thing, but not realizing that Woodshedder’s results show the exact opposite of Asimov’s results for the case of buying a golden cross with falling 200 dsma.
Krusty, there must be a communication breakdown somewhere between me and you.
Without going back to my spreadsheets, there are much more than a few data points where the 200falling/50rising, I think there were 28 instances.
Asimov’s work shows the sum of those trades lost money. That is simply not true.
Again, this kind of conversation makes my point. There are too many bloggers spouting off stuff without using any kind of formal scientific process. I would like to see a more rigid analysis applied, with operational definitions, and such, so that the research can be replicated.
Thanks for the 20week/50week. I’ll take a look at it.
He posted the data straight from Prophet. I doubt it’s bad data. Maybe his assumptions or methods are wrong though, who knows. I don’t care enough to check since it’s not something that’s remotely relevant to my trading, but I trust him since he’s got a proven track record. He basically validated your findings…
I wasn’t concerned either, and that was why I didn’t remark on his research. Maybe he has updated it or changed it or something. I used the spreadsheet he published on google docs. Good to know that whatever he has now validates my results.
Wood, is Friday a Power Dip? Thank you my friend.
Boeing, you trash me at Denninger’s place, then address me as your friend, here. Something smells.
I can’t answer your question. I don’t trade intra-day. Every evening I’ll download data and then make a determination for the next day.
You specifically post yesterday and the day before as a Power Dip. Look forward to see what it is – I didn’t trash you – you in fact argued that I could not navigate out of Denninger’s palace, which I have soundly disproven by typing here. But let’s be constructive in case your avatar turned to look something like mine, my friend.
Boeing, touche’.
Constructive is good.
Honestly, I was out of town yesterday and did not get back home until very late. Consequently, my usual morning post was not available due to me not waking up until the egregious hour of 10 a.m. I hate sleeping that late, and so I was little out of sorts.
I will post a weekly review this weekend.
CRTX looks like a short candidate from here, no? I took profit at $11.xx
The crayons have invaded.
Too much packing and Scheming.
Clojure is your friend.
Seriously though – how hard is it to get a real avatar?
Not very hard. The crayon crab creatures ought to be enough to at least make someone THINK about getting one.