like to know what the
market is going to do,
when it will happen and
by how much. In the real
world, however, nobody
has a crystal ball. Forecasting
deals with the unknown,
and eventual error is
certain. The landscape
is full of forecasters
who have gone wrong. Their
stories are well documented,
and they were viewed as
stars when they were right.
Now they are viewed as
losers. Joe Granville?
He just happened to be
the most flamboyant of
the bunch. Recently, he
too has turned Bullish.
Maybe that’s something
to worry about.
This article is not about
forecasting the market.
It’s about timing, i.e.,
reading our indicators
and letting them tell
us when the market is
rising or falling. It’s
about sensing turning
points and knowing when
to invest aggressively,
and when to take defensive
actions. We want to buy
within five percent of
a bottom and sell within
five percent of a top.
Can we do it? It’s really
very simple.
The market timing system
described below depends
upon two key indicators:
| 1.
The Price of the VectorVest
Composite |
| and |
| 2.
The VectorVest Recommendation
Profile |
Both
indicators were developed
by VectorVest, a stock analysis
system which analyzes over
8,000 stocks each day for
Value, Safety and Timing,
and gives Buy, Sell, Hold
recommendations on each
stock each day.
The Price of the VectorVest
Composite is the most important
indicator used in timing
the market. This indicator
is the average price of
all the stocks in the VectorVest
database. It is reported
each week in VectorVest
Views, a commentary on the
market, along with Stop-Price
and Relative Timing in the
following manner: |
|
| TABLE
1 - VECTORVEST COMPOSITE
(as of 4/11/97) |
| Date |
Price |
Stop |
RT |
| 03/07 |
21.40 |
20.20 |
0.95 |
| 03/14 |
21.10 |
20.20 |
0.95 |
| 03/21 |
20.60 |
19.90 |
0.85 |
| 03/27 |
20.40 |
19.70 |
0.83 |
| 04/04 |
19.90 |
19.50 |
0.75 |
| 04/11 |
19.70 |
19.30 |
0.80 |
|
|
PRICE
Average
Price of all of the
stocks in the VectorVest
Database
STOP
Average
Stop-Price of all
of the stocks in the
VectorVest Database
RT
Average
Relative Timing of
all of the stocks
in the VectorVest
Database
|
When
the Price of the VectorVest
Composite is moving in a
given direction, the market
is moving in the same direction.
As shown above, the Price
of the VectorVest Composite
fell each week from 03/07/97
through 04/11/97. Therefore,
the market was moving down
during this period.
The VectorVest Recommendation
Profile is the second important
indicator used in timing
the market. It gives the
percentage of Buy, Sell,
Hold recommendations in
the VectorVest database
each day. It is reported
in VectorVest Views each
week in the following manner:
| TABLE
2 - VECTORVEST RECOMMENDATION
PROFILE (as of 4/11/97)
|
| Date |
Buys |
Holds |
Sells |
| 03/07 |
19.20% |
56.80% |
24.00% |
| 03/14 |
12.50% |
58.10% |
29.40% |
| 03/21 |
8.80% |
54.60% |
36.60% |
| 03/27 |
7.00% |
55.90% |
37.10% |
| 04/04 |
5.00% |
52.20% |
42.80% |
| 04/11 |
5.30% |
53.30% |
41.40% |
|
|
|
