Friday, January 18, 2013

A new TSX60 Index buy signal

The NYSE tape has improved since year end with the NYSE advance / decline line and the S&P500 breaking to new highs. The only major technical impediment remaining is the failure of the Dow Industrials to break above the October 2012 peaks the confirm today’s new 25-week high posted by the Dow Transports.

Most investors know that our own TSX Composite has been a global laggard for several quarters – but finally today my simple TSX60 timing model – which has been in a “sell” mode since June 2011 has today issued a new “buy” signal. The model is a simple strategy with no math required. Set your “sell” at the lowest low of the past twenty six weeks. This is a moving 26-week window, so each week add the new week and drop the oldest week. The model “Sells” if the weekly price closes below the prior lowest 26-week low. The reverse is applied to the “buy” signal if the price closes above the highest 26-week high.

Below is the summary of trades from 1994 to date. 

At first glance it seems like a lot of trades (8) to beat buy and hold by 4 points on the TSX listed XIU but it did keep us out of the bears of 2000 – 2002 and 2008 – 2009. Below is a zoom in on today’s “buy” signal.

5 comments: said...

Hello Jeremiah

Sorry I can't post your site referral because there is no disclosure about who and where these people are.

Perhaps you have more info

Bill C

Anonymous said...

Hi Bill,

Clarification please:

On 11 Jan 2013 XIU closed at 18.14 and the preceeding week at 18.08, both 26 week highs. So, wouldn't either of these closes qualify as "buy" signals.

Also, on 14 Sept. 2012 the XIU closed at 18.04....another 26 week high. So, shouldn't this close also be a 'Buy" signal?


tturenne said...

Ok, could you explain that in a little more detail? Just kidding! The best methods are simple. Money mgmnt makes the difference.

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