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The following is a guest post by Charles H. Dow Award winner, Wayne Whaley (CTA) of Witter & Lester. If you would like to be privy to his daily market comments and model ratings via daily email, free of charge, email him at wayne[AT]witterlester.com with the subject title “ADD ME TO DAILY EMAIL”.
Below are two charts associated with the Intermediate PTA Model. The PTA Model has three components:
- thrust signals indicated by the up arrows on the top S&P 500 index chart
- Confusion Index signals indicated by the down arrows on the S&P 500 index chart
- and some trend following strategies which are not reflected on the S&P 500 index chart
These three components are weighted chronologically and by quality of signal to give you the bottom composite PTA chart. The PTA model finished today at 38.3 due predominantly to price direction.
As you can see on the top chart, given the thrust signals in the last 12 months, the model has the potential to improve with positive price action, but there is reason for concern on the confusion front. Recall that the model doesn’t like to see a lot of issues going in different directions and our confusion index reached a new 12 month high today of 0.81. However, the confusion index, is itself confused because so many interest rate related funds are making the new high/low list each day.
Today’s daily model was a mildly positive 53, due largely to the fact that the 2nd trading day after a three day weekend has a positive record, especially after a down week. Although they are Wednesdays, they trade like turnaround Tuesdays. The Intermediate Model is a positive 55.9.
Eleven of the last twelve trading sessions after a three day weekend have been up, reversing the trend of the previous three decades.
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