Daily Market Analysis

Daily Market Analysis for 25 Oct 2011 Close

Welcome to Objectively Defined Non-Ambiguous Market Timing Analysis.

Market Timing Direction: NEUTRAL since Oct 21 Close. 

Analysis  Direction  Note
Market Breadth Pattern  Neutral Looking at the indexes, we see heavy sell-off. Would the breakout above resistance on Oct 21 be a failure after all? Only time will tell. I think what comes out of the Euro summit today will determine it. 

But breadth-wise, Tuesday was not a significant day. We did not see many stocks considered distributed. Again, we patiently wait on the sidelines. 

Our Market State monitor is currently in a Weak market state. This means we are already in confirmed bear market. A Weak market state will only change with the arrival of Strong market state.

Primary Breadth Trend  Bearish The primary market breadth is still in bear market territory.
Monetary Conditions  Bullish Monetary base started to decline. However, short-term interest is still much lower than longer term interest rate. Thus, Interest Rate Pump factor continues to rise. Monetary policy is still extra easy.

Note: Any change from previous day summary is highlighted in blue.

Below is the forward-looking market timing track record since the blog started. Next day opening price of SPY is used to calculate gain/loss so that we can take advantage of it in a realistic setting. SPY is used for reference only. You can use other instrument of your liking, e.g. TNA, options, futures. For historical back-testing results, please read the last section of Market Breadth Pattern guide.

Date Action SPY Next Day Open Gain/Loss In Percent
2011-Apr-20 BUY (Long) 133.79

2011-May-09 exit 135.17 1.38 1.03%
2011-May-11 SELL (Short) 135.67

2011-May-26 exit 133.00 2.67 1.97%
2011-May-31 BUY (Long) 134.51

2011-Jun-01 exit 131.96 -2.55 -1.90%
2011-Jun-01 SELL (Short) 131.96

2011-Jun-23 exit 128.27 3.69 2.80%
2011-Jun-23 BUY (Long) 128.27

2011-Jul-13 exit 132.09 3.82 2.98%
2011-Jul-21 BUY (Long) 134.52

2011-Jul-26 exit 132.59 -1.93 -1.43%
2011-Jul-27 SELL (Short) 130.60

2011-Aug-09 exit 115.26 15.34 11.75%
2011-Aug-18 SELL (Short) 112.96

2011-Oct-04 exit 112.62 0.34 0.30%
2011-Oct-04 BUY (Long) 112.62

2011-Oct-17 exit 120.14 7.52 6.68%
2011-Oct-17 SELL (Short) 120.14

2011-Oct-21 exit 124.17 -4.03 -3.35%






Winning %
70.0% 70.0%

Win/Loss Ratio
1.8 1.8

Profit Factor
4.1 4.1

Count
10 10







SPY Point Compounded Trade End



Return Max Drawdown
Market Timing
26.25 21.86% 3.35%
Corresponding SPY
-10.74 -8.03%

Market Breadth Pattern

Click on the Chart itself to see the bigger version.


Primary Market Breadth

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Monetary Conditions

Note: The following charts are updated once every month. The chart was last updated on Oct 21, 2011.

Industry Rotation

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Color legend:

  • BLUE: 1 year leader and 1 month leader,
  • LIGHT BLUE: 1 year leader,
  • LIGHT GREEN: 1 month leader,
  • RED: 1 year laggard and 1 month laggard,
  • MAGENTA: 1 year laggard,
  • ORANGE: 1 month laggard.

Earnings Cycle

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