TtM says we may have a trend developing

Market Date: 10.13.2014

Market Mood Barometer

Last week we introduced the Market Mood. The barometer is an inherent component of TtM and gives us the current overall Market Mood. The mood is derived from a cross section of the entire US market and includes TtM rollups from individual stocks, ETFs, and indexes. This is not your typical “stop light – red/green” indicator. The TtM barometer (current settings) generates a value between approximately 6.48 (Bull Happy) and -6.47 (Bear Angry). The Market Comment is an implementation of my current investment strategy (more like an advisor rather than fact).

As of a recent mid-day update the current value is -4.08. The general recommendation is to position my portfolio at a mix of approximately 25% Long and 75% Short (with some cash). What this means to me is I should begin positioning my portfolio to this mix. I will not run to my broker and buy/sell everything to arrive at this mix immediately. I will start moving towards this mix in my portfolio. With the frequency of the market perturbations right now, who knows where it will be tomorrow. Last week when the barometer was cycling between Complacent and Anxious the barometer was in what I call the “No man’s land.” The recommended mix in this area is either a Hedge (equal parts Short and Long) or Cash (no risk). Now the barometer is showing a definite trend towards a Bear market.

I don’t know about you but with the market volatility we’ve seen lately, I doubt if the Market Mood will stay Cynical for long. However, at this time the market has dipped into the Cynical mood. That’s why I’ll just move in that direction rather than jump on the recommended mix.

Barometer10.13

Let’s take a look at this on a graph. This graph shows the Market Mood for the past few days and is color shaded to represent the Market Mood. This is not a direct artifact of TtM so we won’t see this graph on a regular basis.

MoodGraph10.13

What’s nice about the graph is you get a visual of the mood over several days. When I present this graph it will generally show the mood for the past week or so. Maybe once a month I’ll generate this graph for the previous month. It’s labor intensive to generate this so we’ll see how often we want to see the longer time period. Let me know if you would prefer two weeks as opposed to a single week. At any rate this is what it looks like today.

Let’s take a look at our strategy. If you are not familiar with a N2 (N-squared) diagram you might want to research it.  Note: Yes, I may be scientific and factually inclined and I do use Wikipedia.org as a reference quite often. I also provide support to Wikipedia.org as well as other sites that provide services (license free services). Anyway, the following figure is my current Portfolio Allocation Model as shown in an N2 diagram.

N2 Diagram10.13

 

This diagram is a bit busy but this is an opportunity for us to get on the same page with the TtM strategy and how we use the TtM system. As of today (mid-day) we have a Market Mood that has dipped into the Cynical mood. Last week the market was, for the most part, in the Complacent mood. Therefore, my target portfolio mix is approximately 20% Long and 80% Short (or 100% Cash for those who do not short securities). Within TtM each of the moods between Happy and Angry have two sub-moods (+ and -). The N2 diagram that includes the sub-moods may be more accurate – but is really ugly so we’ll work with this higher level version. This is ok though – we are still keeping with the basic principles of TtM. Provide a mechanical tool which:

  • Relieves (or at least reduces) the anxiety associated with investing in the market
  • Provides personal investment options
  • Provides support for risk management of investments
  • Reduces time and complexity of market investing and management of those investments
  • Eases the overall pain and risk of investing in the market
  • Improves the probability of success with investing

Introducing the 2 Day Long and Short Reports

Ok, now we have a possible trend and TtM says it’s time to look at changing the portfolio allocation (from 50% Long, 50% Short) to 20% Long, 80% Short. There are a couple of ways to do that. In my case (let’s say I was 50% SPY, 50% SH) I could reduce the position in SPY to 20% and increase SH to 80%. Easy! I’m not ready for more aggressive stocks yet… I don’t know if this trend is real so I’d rather take a little less to manage risk.

However, I will start looking at both the Long and Short reports. I’ve mentioned these before and now, it is time to dig a little deeper. The Long and Short reports are generated daily and include those securities in the TtM Catalog (our universe of securities) which have changed state either today or yesterday (the previous trading day). Today’s Long Report is shown below.

Long Report10.13

Let me explain some of the data on this report. To me this data is really the TtM discriminator. I have never seen a system that with a push of a button can tell you what securities you may want to consider for investment today. An explanation of the fields on this report.

Trailing Stop (%) – No more guessing (or stressing) about this value. TtM (actually SM2) generates this value to avoid “head fakes” but catch a trend as early as possible.   Conversion (% to $):

Long = (1.0 – (TS% / 100.0)) * Last Trade $

Short = (1.0 + (TS% / 100.0)) * Last Trade $

TtM Portfolio – TtM initializes the portfolio value to 1.00 on day 1 of its training period (during the data series characterization process). All reports generated for tradethemoods.com are generated with a short/long viewpoint. What this means is the symbols accrues gain in both states (as if you traded long => short => long… on state changes). Therefore for a portfolio of 1.66, the symbol theoretically would have gained 66% over its TtM life. The TtM life is both the training period (sample size) and monitoring phase. The shorter the monitoring phase (time since last characterization update), the more accurate TtM’s results.

Current State/Mood – For the Long Report I would expect these to be “Bull” and “Happy.” Conversely, for the Short Report I would expect “Bear” and “Angry.” However, it is not uncommon to see another mood on symbols that have been in state for a couple of days (see Days In State). This means the security saw an unusual excursion and back off the next day. TtM certainly tries to avoid this situation but the market is the market.

Win Probability (%) – TtM has a proprietary method of calculating the probability that you will at least get your money back on an investment. The higher the number of trades, the more accurate this estimate is. Since TtM keeps the number of trades to a minimum (my strategy), this value is an estimate used for risk management.

Risk ~= 1.0 – (Win Probability / 100.0)

Now let’s look at the Short Report

Short Report10.13

Report Analysis:

To be honest, with the market volatility I’d rather stay with a more stable index that I can short as well as buy (long) such as SPY and SH or, QQQ and PSQ. That’s just me though. Out of these reports I might be inclined to look at KND (in the Long Report) more closely. First, TtM has an algorithm to rate each of the securities on these reports based upon overall risk.  Each symbol has a rating between 0 and 10. KND was rated overall at 3.57 (3.57 is not all that bad since the algorithm is very conservative). Also, let me mention that each of these report (Long and Short) had many entries that did not make the TtM cut as far as investment risk.

Long Report = 40 entries

Short Report = 128 entries

Other data I look at as part of the investment analysis include:

Today’s Gain = -2.43 (when I ran the report KND had lost 1.43 for the day. It ended at -2.43)

Price Range = 46.27% (this is where the last price fell with respect to the sample high. PR = (sample high – last price) / (sample high – sample low)

Delta Volume = 121% (Delta Volume = (today’s volume – average volume) / average volume). Today’s gain (-2.43) had legs… not good

Let’s look at the graph for KND.

KND Graph10.13

TtM drew this graph with the default settings (KND price and TtM state). Although TtM beat the “buy and hold” strategy by 12.8% I don’t like the tendency for large price excursions. Sometimes I would have been on the right side and others not.

Overall, I think I’ll pass on KND. You often find little gold nuggets in the Long and Short reports. Not today.

Summary

We’ve covered quite a bit today.

We see a potential trend developing (Bull to Bear). For the Long only investors it is time to go to cash. For the Long/Short investors, I’d be looking at somewhere around 25% Long and 75% Short (with some cash).

Since we are now looking at possible additions to our portfolio I introduced the 2 Day Long/Short reports. These show those securities recommended by TtM for investment consideration. This doesn’t mean you would run out and invest in these without doing more homework. For KND we looked at some indicators and determined it wasn’t something we wanted to invest in today.

We looked at a graph of KND that shows the stock price and also TtM’s state. The elegance of TtM is it’s simple representation of a very complex solution; what state is this symbol in from an investment standpoint and how long has it been in that state.

You may also like...

No Responses

  1. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Fantastic postings, Appreciate it.

    viagra without presciption online viagra dogal
    buy viagra
    generic viagra canadian pharmacy – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  2. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    You’ve made your point pretty well!!

    purchase viagra online take alternative viagra and take nitrates
    buy generic viagra
    compare viagra to cealis – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  3. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    With thanks. Loads of material.

    long term effects using viagra las vegas kamagra viagra about
    viagra 100mg
    buy keyword online viagra – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  4. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Fantastic stuff. Appreciate it.

    efectos del viagra viagra and ritalin
    viagra without a doctors prescription
    prescription viagra without – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  5. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    You said it very well.!

    viagra sex viagra prescription order
    generic viagra 100mg
    viagra physer – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  6. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Very good postings. Regards!

    dog ate viagra tablet any danger why men without ed use viagra
    viagra without a doctors prescription
    viagra cost in canada – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  7. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Great content. Cheers!

    viagra and attacks heart viagra girls
    buy generic viagra
    viagra assistance – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  8. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    With thanks. An abundance of info!

    generac name for viagra 210 area code viagra
    viagra for sale uk
    effects side viagra woman – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  9. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    With thanks, I like it!

    get viagra now viagra canadian tv ad
    cheap viagra
    buying us online viagra – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  10. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Valuable forum posts. Many thanks.

    caterpillar fungus india’s viagra viagra istambul
    viagra 100mg
    levitra vs viagra – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  11. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Many thanks! Lots of postings!

    generic viagra wholesale purchasing viagra in bali
    viagra online
    viagra falls southern rock – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  12. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Superb write ups. Thanks a lot!

    viagra constapation viagra bottle
    generic viagra 100mg
    depakote viagra interaction – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  13. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Very good information. Thanks.

    viagra online href foro forum viagra 911 call
    viagra without a doctor prescription
    distribution channel of viagra – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  14. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Thanks. Wonderful information!

    generic viagra reviews viagra softgels
    viagra online
    patent date for viagra – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  15. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Awesome material. Regards!

    viagra ingredient online pharmacy viagra paypal
    viagra without a doctors prescription
    viagra generic form – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  16. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    This is nicely said. !

    generic viagra super active plus fruit benefits similar to viagra
    buy viagra
    viagra 100 brand name – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  17. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    You made your position very nicely.!

    viagra post surgery herbal viagra reviews
    viagra without a doctor prescription
    viagra information – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  18. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Nicely put. Cheers.

    edinburgh viagra good search pages find cheap viagra profisional line only uk
    viagra without a doctors prescription
    tulip viagra – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  19. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    With thanks. I appreciate this.

    cheapest prices on viagra male chastity games with viagra
    buy generic viagra
    research on copd and viagra – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  20. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Whoa many of good facts!

    amy reid is viagra really needed viagra blue vision
    generic viagra 100mg
    find viagra free search 76k buy – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  21. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Many thanks, An abundance of tips!

    viagra nitrolingual canadian drugs viagra
    buy viagra
    viagra all natural – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  22. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Truly lots of very good knowledge.

    sod gold viagra viagra from china fake
    generic viagra
    viagra causing infertility in males – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  23. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Wow many of very good tips.

    light switch plate viagra viagra and lisinopril
    buy viagra
    apcalis dysfunction erectile levitra viagra – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  24. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Thanks. Ample information.

    transexuals viagra free herbal viagra
    generic viagra 100mg
    viagra banned from the olympics – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  25. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Helpful stuff. Regards!

    viagra prices 50mg and 100mg girl viagra tube
    generic viagra online
    viagra 10mg 20mg – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  26. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Seriously plenty of beneficial facts!

    safe dose of viagra cost of viagra pill
    generic viagra 100mg
    natural viagra type alternatives – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  27. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Wow loads of fantastic tips!

    viagra to combat propecia effects side viagra
    viagra without a doctor prescription
    viagra and xanax – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  28. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Very well voiced without a doubt. !

    avodart vs viagra cheap viagra uk
    viagra generic
    canadian viagra costs – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  29. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Wonderful knowledge. Regards.

    quick forum readtopic viagra answer content natural viagra adam
    viagra generic
    viagra homeopathic – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  30. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Valuable postings. Regards!

    viagra delivered in 24 hours drug interractions between flomax and viagra
    buy viagra
    side effects of children using viagra – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  31. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Reliable forum posts. With thanks!

    stco viagra action of viagra
    viagra without a doctors prescription
    viagra soft tabs description – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  32. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    You said it nicely.!

    best online price for viagra viagra no prescription required
    generic viagra
    viagra in india – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  33. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    This is nicely said! !

    positive test for viagra young adults viagra
    viagra generic
    buy viagra ship fedex – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  34. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Really plenty of awesome knowledge.

    tramadol online prescriptions free viagra how often can you use viagra
    viagra without a doctor prescription
    viagra boosts post cuddle – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  35. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Great content, Appreciate it.

    buying viagra in ireland diabetes medication and viagra
    viagra online
    theodore schenk counterfit viagra – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  36. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Reliable info. Thanks a lot!

    natural viagra or other substitute ingredients in viagra
    viagra without a doctors prescription
    viagra lowers blood pressure – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  37. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    You actually reported that terrifically!

    generic viagra australia kamagra kamagra kamagra lovegra uk viagra
    viagra 100mg
    viagra insurance – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  38. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    You’ve made your stand quite effectively!.

    is 35 too young for viagra other viagra
    viagra 100mg
    louis murphy viagra – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  39. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Info clearly regarded!!

    male chastity games with viagra viagra herb
    viagra online
    viagra boost dopamine – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  40. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    You actually revealed that exceptionally well!

    viagra rub-on does viagra work for mental ed
    generic viagra 100mg
    viagra email offers – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  41. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Many thanks. A lot of forum posts.

    best place to buy viagra online viagra without prescription paypal
    viagra generic
    took 100mg viagra – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  42. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Beneficial forum posts. Appreciate it.

    what happens when teens take viagra sould i take viagra with noxplode
    viagra without a doctor prescription
    viagra help premature ejaculation – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  43. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Effectively expressed indeed! .

    europe online sale viagra is there a women’s viagra
    viagra without a doctors prescription
    buy cheao cgeap kamagra uk viagra – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  44. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Very good stuff. Regards.

    viagra side effect interaction use of viagra in pediatrics
    generic viagra online
    drm viagra – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  45. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Thank you, I like this.

    viagra safe for ladies blue moon viagra
    generic viagra online
    where can i get viagra – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  46. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Effectively expressed without a doubt! .

    zapiro cartoon viagra coupons for cialis viagra or levitra
    viagra generic
    viagra cialis health erection penis man – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

  47. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Thanks a lot, I like this.

    viagra real thing gel generic tab viagra
    viagra for women
    viagra 34434 buy cheap viagra online – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  48. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Nicely put. Thanks.

    viagra as a recreational drug natural version of viagra
    viagra generic
    viagra blue candy – https://genericviagramsl.com

    KeithPah
    Richardnek
    ErnestoThura

  49. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Thank you, Quite a lot of data.

    viagra prescription drug viagra like drugs
    generic viagra online
    online prescription viagra phentermine meridia adipex – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  50. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Excellent facts. With thanks!

    is viagra pro safe viagra $149
    generic viagra 100mg
    cheapest generic viagra caverta veega – https://genericviagrantx.com

    KeithPah
    Richardnek
    ErnestoThura

  51. ErnestoThura says:
    Your comment is awaiting moderation. This is a preview, your comment will be visible after it has been approved.

    Thanks! I appreciate this.

    generic viagra canada wholesale viagra torrent
    generic viagra online
    impotence drugs since viagra – https://genericviagrarcp.com

    KeithPah
    Richardnek
    ErnestoThura

Leave a Reply

Your email address will not be published. Required fields are marked *