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Marty Zweig (RIP) Two rare Zweig momentum indicators

Hi Junkster, this is a continuation of our discussion.
My last post had a link to NYSE up/down volume. I don't know how to save charts on this site but here it is

If you don't mind supply links to support Zweig claims, just like I did..

Junkster: In fairness to Zweig his signal was based on two 9 to 1 days within 3 months. He noted in his book the failure of singular 9 to 1 days. More importantly it is also based on NYSE advance/decline volume and not the [email protected] - a huge and significant difference. This latest signal meets the criteria so we shall see if it has any accuracy. The point is BOTH of his momentum indicators came into play at the same time- a rarity. If this fails I would put much less emphasis on his indicators.

Edit. To quote myself on indicators. “ They should never be used as precise, absolute, black and white trading signals. Indicators are best used as clues or hints to future price action. Thus interpreting indicators is more art than a science........ What counts in trading is what the market is saying, not the indicators”



FD1000: There's is a small difference in principle between NYSE to SP500.

We had it twice or more in 2009, 2010, 2011 and didn't have it 2012-2019. This means that if you waited for the signal of 2 days within 3 months it never came.

Basically, the facts still stand, you get 1 and more every time the SP500 goes down over 10%...chart...and it's reasonable. After a 10% correction, you will get days of huge up/down volume.

So, a rule of thumb might be, every time the SP500 goes down more than 10% rebalance...or...even simpler, every time your stocks to bond is 5% off sync --> rebalance.

For my trades I look for indicators that tell me on a specific day when to buy and MACD is pretty accurate.

Comments

  • edited January 10
    FD , Hope to see you begin posting here. But beware some of your adversaries such as the Gatorbyters and Stillers of the world would never have their posts deleted here. And posting after the fact is a big no no here. And also be prepared to validate yourself and claims. I made a comment awhile back here about my trading versus if I had just been a buy and holder. The end result is I had to send someone all my 1040s from the early 90s to last year as well as my current brokerage statement. But I am use to that. This business is filled with crooks, con men, charlatans and other Pretenders who can do the talk but can never do the walk. I am going to post on that very topic here soon.

    I would like to see your feedback on Zweig but please purchase his book. What do you mean support his claims? His book is a Wall Street classic. Are you insinuating his test results are fabricated or incorrect?

    You are shooting the messenger here. I am simply reporting on his indicators in his book and where he has the dates of all the signals and where the market was 3, 6, and 12 months later.
    What struck me is how rare it is when BOTH signals kick in at the same time as they just recently have. According to Zweig we are off to the races now because of this out of the ordinary momentum and the market won’t look back. We won’t have to wait long to see if Zweig still has it or if the markets are so different now as to make them ineffectual. They have never kicked in during a government shutdown so I think that could be the fatal flaw if it drags on for a lengthy period.

    Again, welcome to the forum.

  • As I pointed in my first post I like to include links to prove my points and why I included a chart. Please include charts to support yours.
    I'm not going to buy his book because I can find his ideas on the web + I'm looking for indicators that work in the next day-one week. Over the years I read of several indicators/"gurus" and proved they were all wrong or can be off by months and years. (link)https://socialize.morningstar.com/NewSocialize/forums/p/379703/3896435.aspx#3896435
    It looks pretty reasonable that a market that went down over 10% will be up close to that in the next several months.
    Since I can't change things that I posted I will not post here very much because I may make a mistake and/or want to change my narrative.
    You are welcome to post on M*, any comment is welcome and we can discuss anything, I don't understand your comment "This board does not allow lively discussions because of the manner in which it is monitored." I do that all the time.
  • edited January 11
    Charts? You really don’t know my background. I have written extensively about my distaste for charts. I spun my wheels seemingly forever until I decided to throw away the charts and that turned my trading completely around. To originally build my nest egg I daytradev stock index futures and not once looked at a chart. This would be a discussion for another time? You sure have some strong opinions about trading. I thought your background and career was IT.

    We agree on the indicator gurus and another area I have written about extensively. Back in the day I knew most all of them and they all shared one thing in common. None of them were successful traders - not one. They simply pandered ultra expensive and worthless trading systems, etc. The stories I could tell about some of the Pretenders in that field.

    You can edit real easily here. You can see a small wheel right top of your post. Click on thst and you see dee “edit”

    By the way as you can read below where I am mentioned, my favorite trading book of all time was the one by Nicolas Darvas. Zweig’s is a distance third or fourth.


    http://ezinearticles.com/?Was-Nicolas-Darvas-One-of-the-Greatest-Traders-Ever?&id=4316551
  • edited January 11
    Hello @Junkster & @FD1000: Not seeking to get in the middle of this discussion. But, I did want to make note that Liz Ann Sonders (now with Charles Schwab) use to work for Marty Zweig. During a recent apperance on CNBC she made reference to these two indicators that the two of you have in discussion.

    I have linked her CNBC appearance below. It is titled "Uncertainties remain, but the recent rally is decent." Hope you enjoy.

    https://www.cnbc.com/video/2019/01/09/uncertainties-remain-recent-market-rally-decent-liz-ann-sonders.html
  • Zweig ( working with Ned Davis ) was an early pioneer of quantitative analysis. Yet, most analysis since the 1980's has been weak as the main thrust and profit center of finance has been the acquisition of assets under management with associated fees garnered ( ie incentive towards quant analysis with an eye towards generating alpha is way down on the agenda ).

    An important premise to keep in mind is to hold equity based assets for longest optimal periods. Once in a great while, a switch to duration assets for a short period may occur ( 20% of the time) . https://tinyurl.com/yadh6tsq

    Returns after larg(est) quarterly market losses ( of which 4th quarter 2018 was one), accompanied by a cross of the S&P 500 above its long period moving average ( pending ), has had a stellar track record with above average returns produced over future 1, 2, and 5 year cum returns periods: https://imgur.com/a/Eoj26AS
    Zwieg signal may or may not have accompanied these post quarterly loss events.
  • @jstr: Thanks for stopping by.
    Derf
  • jstr said:

    Zweig ( working with Ned Davis ) was an early pioneer of quantitative analysis. Yet, most analysis since the 1980's has been weak as the main thrust and profit center of finance has been the acquisition of assets under management with associated fees garnered ( ie incentive towards quant analysis with an eye towards generating alpha is way down on the agenda ).

    An important premise to keep in mind is to hold equity based assets for longest optimal periods. Once in a great while, a switch to duration assets for a short period may occur ( 20% of the time) . https://tinyurl.com/yadh6tsq

    Returns after larg(est) quarterly market losses ( of which 4th quarter 2018 was one), accompanied by a cross of the S&P 500 above its long period moving average ( pending ), has had a stellar track record with above average returns produced over future 1, 2, and 5 year cum returns periods: https://imgur.com/a/Eoj26AS
    Zwieg signal may or may not have accompanied these post quarterly loss events.

    Thanks for the data you presented. I have always been a fan of Ned Davis too. And remember Lowry? As I posted on the other forum I wish I had never even brought up this topic. It somehow degenerated into a discussion on indicators. For Zweig’ latest signals to prove valid and get a 10% return in the next six months would require an [email protected] in the 2784 to 2842 range. I doubt few here, including me, expect that scenario to unfold. I am rooting for Zweig though if only to validate his observations on the power of out of the ordinary momentum.

  • junkster,

    Thanks for the Zweig info and all of your other informative and relevant posts here and elsewhere. Please keep 'em coming.

    s
  • FD1000,

    Do drop in.

    From the limited time I read the posts on Morningstar, I am impressed with yours. It seems like you would enjoy a lively discussion with the Junkster and others here on MFO.

    Mona
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