J.J.'s Risky Business: March 2014

Friday, March 21, 2014

ABC Indicator Makes the Grade in Its Public Test

The ABC Indicator of movements in the S&P 500 (INDEXSP:.INX) introduced in a J.J.’s Risky Business blog post in December behaved well during its recent public test here. Over the course of the test, the indicator’s signals were correct on eight occasions, or 80.00 percent of the time, and incorrect on two occasions, or 20.00 percent of the time.

Accordingly, the overall results were in line with the ABC Indicator’s history, which before the launch of the now-completed test suggested they would be successful between six and eight times and unsuccessful between two and four times. Since assuming its current form on July 6, 2009, the indicator’s performance in forecasting the short-term direction of the U.S. large-capitalization index on a closing basis can be summarized as follows:

• Its signals have been correct on 99 occasions, or 69.72 percent of the time, and incorrect on 43 occasions, or 30.28 percent of the time.

• Its Buy signals have been right on 57 occasions, or 80.28 percent of the time, and wrong on 14 occasions, or 19.72 percent of the time.

• Its Sell signals have been right on 42 occasions, or 59.15 percent of the time, and wrong on 29 occasions, or 40.85 percent of the time.

During the ABC Indicator’s recent public test at J.J.’s Risky Business, it produced as follows:

• In the case of the Buy signal on Dec. 20, the S&P 500 on a closing basis rose to as high as 1,848.36 on Dec. 31 from 1,809.60 on Dec. 19. Successful.

• In the case of the Sell signal on Jan. 3, the index on a closing basis fell to as low as 1,826.77 on Jan. 6 from 1,831.98 on Jan. 2. Successful.

• In the case of the Buy signal on Jan. 10, the S&P 500 on a closing basis rose to as high as 1,842.37 on Jan. 10 from 1,838.13 on Jan. 9. Successful.

• In the case of the Sell signal on Jan. 14, the index on a closing basis rose to 1,838.88 that day from 1,819.20 on Jan. 13. Unsuccessful.

• In the case of the Buy signal on Jan. 15, the S&P 500 on a closing basis rose to as high as 1,848.38 that day from 1,838.88 on Jan. 14. Successful.

• In the case of the Sell signal on Jan. 24, the index on a closing basis fell to as low as 1,741.89 on Feb. 3 from 1,828.46 on Jan. 23. Successful.

• In the case of the Buy signal on Feb. 11, the S&P 500 on a closing basis rose to as high as 1,859.45 on Feb. 28 from 1,799.84 on Feb. 10. Successful.

• In the case of the Sell signal on March 4, the index on a closing basis rose to 1,873.91 that day from 1,845.73 on March 3. Unsuccessful.

• In the case of the Buy signal on March 5, the S&P 500 on a closing basis rose to as high as 1,878.04 on March 7 from 1,873.91 on March 4. Successful.

• In the case of the Sell signal on March 14, the index on a closing basis fell to as low as 1,841.13 that day from 1,846.34 on March 13. Successful.

Source: This chart is based on J.J.’s Risky Business proprietary data.

ABC Indicator Flashes S&P 500 ‘Sell’ Signal: Jan. 3

ABC Indicator Flashes S&P 500 ‘Buy’ Signal: Jan. 10

ABC Indicator Flashes S&P 500 ‘Sell’ Signal: Jan. 14

ABC Indicator Flashes S&P 500 ‘Buy’ Signal: Jan. 15

ABC Indicator Flashes S&P 500 ‘Sell’ Signal: Jan. 24

ABC Indicator Flashes S&P 500 ‘Buy’ Signal: Feb. 11

ABC Indicator Flashes S&P 500 ‘Sell’ Signal: March 4

ABC Indicator Flashes S&P 500 ‘Buy’ Signal: March 5

ABC Indicator Flashes S&P 500 ‘Sell’ Signal: March 14

Disclaimer: The opinions expressed herein by the author do not constitute an investment recommendation, and they are unsuitable for employment in the making of investment decisions. The opinions expressed herein address only certain aspects of potential investment in any securities and cannot substitute for comprehensive investment analysis. The opinions expressed herein are based on an incomplete set of information, illustrative in nature, and limited in scope. In addition, the opinions expressed herein reflect the author’s best judgment as of the date of publication, and they are subject to change without notice.

Friday, March 14, 2014

ABC Indicator Flashes S&P 500 ‘Sell’ Signal: March 14

The ABC Indicator of movements in the S&P 500 (INDEXSP:.INX) introduced in a J.J.’s Risky Business blog post in December is flashing a Sell signal this Friday morning. This is the 10th and last signal delivered during the current public test of the indicator here.

Over the course of this ABC Indicator test, its signals have been correct on seven occasions, or 77.78 percent of the time, and incorrect on two occasions, or 22.22 percent of the time. Thus, the overall results will be in line with the indicator’s history, which before the launch of the test suggested they would be successful between six and eight times and unsuccessful between two and four times.

Since assuming its current form on July 6, 2009, the ABC Indicator’s behavior in forecasting the short-term direction of the U.S. large-capitalization index on a closing basis has produced the following track record:

• Its signals have been correct on 98 occasions, or 69.50 percent of the time, and incorrect on 43 occasions, or 30.50 percent of the time.

• Its Buy signals have been right on 57 occasions, or 80.28 percent of the time, and wrong on 14 occasions, or 19.72 percent of the time.

• Its Sell signals have been right on 41 occasions, or 58.57 percent of the time, and wrong on 29 occasions, or 41.43 percent of the time.

And since the beginning of its current public test at J.J.’s Risky Business, the ABC Indicator has performed as follows: