=============================================================================== Charles Richards' Headsup Analysis for dowl Family - 11/09/11 (Email questions to charlesarichards@sbcglobal.net) =============================================================================== Market Health: The Russell 2000 historically leads the stock market. There are four possible results: 1) MACD above zero and rising (the best; you want to be fully invested) 2) MACD above zero and falling (may be just a short-term whipsaw, but stay alert) 3) MACD below zero and falling (the worst scenatio; bad things happen here) 4) MACD below zero and rising (a good situation in a risky environment) 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- Russell's 19/39 weekly MACD -15.26 -15.32 -15.77 -16.13 -16.51 Change from one week ago 1.69 1.88 1.47 1.46 1.64 NEGATIVE MACD, POSITIVE TREND 1. This is an uptrend, albeit in a risky environment. 2. However, be prepared to bail out should the weekly trend turn negative again. That would be a dangerous time to be invested. ============================================================================= OUR 'FEAR' INDICATOR VIX (implied volatility of S&P 500 index options): 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- RSI/Stochastic of VIX 50.49 39.62 41.91 40.93 40.07 VIX is above 50, indicating RISING FEAR in the market place. =============================================================================== DON BEASLEY'S ASSET COMMITMENT MODEL: THE NYSE IS THE DOMINANT MARKET It's generally tougher to make money when the NYSE is dominant. 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- Large-Cap Score (1 to 13): 13.00 13.00 13.00 13.00 13.00 Small-Cap Score (1 to 15): 10.00 10.00 10.00 10.00 10.00 The Nasdaq environment is POSITIVE The NYSE environment is POSITIVE 0- 5 points = High Risk (invest 0% to 25% in a NEGATIVE environment; invest 25% to 50% in a POSITIVE environment) 6-10 points = Medium Risk (invest 50% to 75% in a NEGATIVE environment; invest 75% to 100% in a POSITIVE environment) 11-15 points = Low Risk (invest 100 percent in a NEGATIVE environment; invest 100 percent in a POSITIVE environment =============================================================================== OUR PRIMARY RANKING TOOL -- THE RSI/STOCHASTIC Issues over 65 are in a very strong uptrend. Issues over 50 are in an uptrend Issues under 50 are in a downtrend issues under 40 are in a very strong downtrend =============================================================================== BUY RULES From a new buy position following a significant correction, volatility is good. The funds that got killed the worst are absolutely going to be the best performers on the way out of the decline. The fewer funds you can own, the better off you are -- the more likely your returns are going to be better than average. Best time to buy is soon after a fund crosses above 50 with good momentum. Pick one that's just over 50 and rising, rather than a fund that's already over 65. Buy only if all the following are true: 1. VIX is under 50 (less fear in the market) 2. Fund is over 50 (fund is in an uptrend) 3. Fund is moving higher with conviction (the higher the momentum, the better) Consider leverage only if all of the following are true: 1. Russell 2000 oscillator and trend are both positive 2. VIX is under 40 (declining fear in the market) 3. Index fund is over 60 =============================================================================== SELL RULES Two cardinal rules: 1. Never sell if fund is over 65 (fund is in a very strong uptrend) 2. Never buy or own a fund under 50 (fund is in a downtrend) If VIX is over 50 (rising fear in the market), sell any fund under 65 Consider shorting only if all of the following are true: 1. Russell 2000 oscillator and trend are both negative 2. VIX is over 60 (rising fear in the market) 3. Rank of bear fund or inverse index fund is over 60 =============================================================================== TRADE-UP RULES The idea is to hold our funds for weeks, or even months. Have a reason for doing it. Maybe its momentum is not so good. When you trade up, better to pick a fund in the 50s with momentum rather than one that is over 65 and perhaps over-extended. When trading up in the middle of an uptrend, pick a fund that is safe. Look for stability. Trade up only if all the following are true: 1. Your fund's rank is under 60 2. VIX is under 50 (less fear in the market) 3. A weekend ranking reveals a more attractive fund =============================================================================== FundRank Momentum 1day ROC -------- -------- -------- DJ-30 INDEXFAM DJ 30 Industrials Ind 65.64 -2.87 -2.69 RUT-I INDEXFAM Russell 2000 CBOE Ind 62.60 -5.05 -4.82 SP-CP INDEXFAM S&P 500 Composite Ind 62.08 -5.48 -3.67 VIX-X INDEXFAM CBOE Market Volatilit 50.49 10.40 31.59 =============================================================================== HOW FUNDS HAVE PERFORMED RECENTLY: 1wk %ROC 2wk %ROC 3wk %ROC 1mo %ROC -------- -------- -------- -------- VIX-X INDEXFAM CBOE Market Volatilit 10.45 21.10 4.99 10.04 DJ-30 INDEXFAM DJ 30 Industrials Ind 0.05 -0.22 2.94 3.73 SP-CP INDEXFAM S&P 500 Composite Ind -0.71 -1.04 1.59 2.81 RUT-I INDEXFAM Russell 2000 CBOE Ind -1.96 -1.14 3.53 4.34 =============================================================================== HOW FUNDS HAVE PERFORMED RELATIVE TO THEIR MOVING AVERAGES: Price 20d MA 40d MA 50d MA 100d MA 200d MA -------- -------- -------- -------- -------- -------- DJ-30 INDEXFAM DJ 3 11842.51 11809.27 11648.44 11624.37 11668.50 11682.65 RUT-I INDEXFAM Russ 718.86 725.51 714.90 715.00 729.44 743.23 SP-CP INDEXFAM S&P 1229.10 1236.57 1220.90 1219.02 1227.96 1236.26 VIX-X INDEXFAM CBOE 36.16 31.63 32.47 32.40 30.31 26.95 =============================================================================== OTHER KEY MARKET INDICATORS: ============================ McCLELLAN SUMMATION INDEX: 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- Nasdaq SUMMATION INDEX: 1408.29 1443.64 1370.86 1349.37 1302.24 NYSE SUMMATION INDEX: 3150.49 3184.46 3066.79 3002.46 2932.41 =============================================================================== PRICE OSCILLATOR (compares 19-day and 39-day moving averages): Of the gain in the New York Stock Exchange, 71 percent comes in the 57 percent of the time the NYSE price oscillator is positive. Of the gain in the Nasdaq, 99.78 percent of the gain comes in the 63 percent of the time the Nasdaq price oscillator is positive. 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- NASDAQ PRICE OSCILLATOR 34.30 37.82 35.52 34.51 33.66 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- NYSE PRICE OSCILLATOR 0.73 0.81 0.74 0.70 0.66 =============================================================================== Nasdaq NEW HIGHS AND NEW LOWS: New Highs and New Lows capture the heart and soul of every move in the market. Of the gain in the Nasdaq, 44 percent is captured in the 29 percent of the time that new highs on the Nasdaq are at 135 or higher. NASDAQ NEW HIGHS: 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- NASDAQ 52-WEEK NH: 11.00 50.00 33.00 34.00 40.00 NASDAQ NEW LOWS: 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- NASDAQ 52-WEEK NL: 74.00 51.00 48.00 43.00 50.00 =============================================================================== NYSE NEW HIGHS AND NEW LOWSs: Of the gain in the NYSE, 26 percent are captured in the 20 percent of the time that new highs are at 115 or above on the NYSE. NYSE NEW HIGHS: 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- NYSE 52-WEEK NH: 29.00 75.00 55.00 39.00 48.00 NYSE NEW LOWS: 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- NYSE 52-WEEK NL: 39.00 15.00 16.00 16.00 14.00 =============================================================================== RUSSELL 2000: 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- RSI, RUSSELL 2000: 49.81 58.80 56.81 57.13 58.36 =============================================================================== NASDAQ McCLELLAN OSCILLATOR: GOOD iF NASDAQ McCLELLAN OSCILLATOR = 14 OR HIGHER. BAD IF NASDAQ McCLELLAN OSCILLATOR = -3 OR LOWER. 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- NASDAQ ADV MINUS DECL: -1907.00 1125.00 -341.00 -680.00 1238.00 NASDAQ McCLELLAN OSCILLATOR: -35.35 72.77 21.50 47.13 96.65 =============================================================================== NYSE McCLELLAN OSCILLATOR: GOOD if NYSE McCLELLAN OSCILLATOR = 16 OR HIGHER. BAD if NYSE McCLELLAN OSCILLATOR = -9 OR LOWER. 11/09/11 11/08/11 11/07/11 11/04/11 11/03/11 -------- -------- -------- -------- -------- NYSE ADV MINUS DECL: -2473.00 1460.00 289.00 -632.00 1692.00 NYSE McCLELLAN OSCILLATOR: -33.97 117.67 64.33 70.05 130.19 =============================================================================== Headsup Copyright © 1999-2010 by Charles Richards Disclaimer: The financial markets are risky. Investing is risky. Past performance does not guarantee future performance. The foregoing has been prepared solely for informational purposes and is not a solicitation, or an offer to buy or sell any security. Opinions are based on historical research and data believed reliable, but there is no guarantee that future results will be profitable. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this publication. The past performance of any trading system or methodology is not necessarily indicative of future results. =============================================================================== Headsup module is updated with mutual fund data provided by Investors FastTrack ... http://www.fasttrack.net =============================================================================== =============================================================================== FNU's that can be plotted: OTC MACD mdotc.fnu Bond MACD btstr.fnu NY Adv/Decl nyadc.fnu NY McClellan Osc nymco.fnu NY McClellan Summation nymcs.fnu NS Adv/Dec nsadc.fnu NS McClellan Osc nsmco.fnu NS McClellan Sum nsmcs.fnu Nasdaq Hi-Lo Sum smacd.fnu NY Hi-Lo Score yhilo.fnu Nasdaq Hi-Lo Score shilo Large Cap Score lcskr.fnu Small Cap Score scskr.fnu Beasley Score skbea.fnu NY Environment nyenv.fnu Nasdaq Environment nsenv.fnu Weekly 19/39 MACD, Russell 2000 rutos.fnu RSI, Russell 2000 r2rsi.fnu Nasdaq Advances minus Declines saddc.fnu New York Adv Minus Decl yaddc.fnu US Bond 30 Osc bnd30.fnu Dominant Market Signal otsig.fnu NY Signal nysig.fnu Interest Rate Signal skint.fnu =============================================================================== SIG Files that can be used Market dominance Signal OTC.sig =============================================================================== \ft\skbea.fnu created \ft\bnd30.fnu created \ft\lcskr.fnu created \ft\mdotc.fnu created \ft\nsenv.fnu created \ft\nsmcs.fnu created \ft\nsadc.fnu created \ft\nsmco.fnu created \ft\nyenv.fnu created \ft\nymco.fnu created \ft\nymcs.fnu created \ft\nyadc.fnu created \ft\nysig.fnu created \ft\r2rsi.fnu created \ft\rutos.fnu created \ft\skint.fnu created \ft\smacd.fnu created \ft\scskr.fnu created \ft\ymacd.fnu created \ft\sig\OTC.sig created \ft\vixrs.fnu created \ft\sig\rsvix.sig created ===============================================================================