For VV post.
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Well, do not give up VV's market timer that fast. Look at the history and my reasoning.
* Confirmed calls are quite accurate but usually two weeks late (a lot of money to be made or lost in these two weeks) for long-term timing in almost all market cycles. If you follow them, you will avoid most (if not all) losses during the market bottoms. It is quite impressive.
* There have 3 reversals of calls in this market this year. Normally only happens about once a year from the 11 years of VV.
* It is a mechanical system. I do not really like any changes.
* Personally I do not follow this time. Why? Market bottom is hard to predict. As in my other posts, I buy at dips and sell when high as DnUp (short-term down and long-term up) is my good friend.
It works so far. It may not always work. It could be the market pattern this time is not a V but a W shape expecting another 15% down. It is a bet that everyone has to take action according to his/her comfort level. When it is 15% down, you need 30% up to break even.
According to chartists, the system should go another 25% below (Elliott wave or other theory) and some fundamentalists thought so too as the conditions had not been improved. Luckily I ignored all of them and Dow moved above 10,000. So experts are not always right and I'm wrong a lot of time but not this time betting on large amount of money on the sideline. I'm still betting on no 15% down very carefully.
Another point to note. Are we into the same pattern of Japan with 10 years of no market growth? It is quite possible judging from the similar economical conditions. Unless I had a time machine, I cannot really tell you exactly what the market is heading. TonyP4
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1- substitute vti for vvc (eliminates lots of lo priced garbage)
ReplyDelete2 - on weekly chart of vti - look at price vs 13 week ema.
3 - sell signal confirmed when weekly close is < 13 ema and holds for second weekly close.
4 - buy signal opposite. based on dr. elder's work. take a look.
hank
Hank,
ReplyDeleteI plugged your suggested info into StockCharts.com and sure enough...it
"confirmed" only one of the VV "confirmed" calls this year...the March 26 C/Up.
So far one good call and three bad ones. A .250 batting average.
Thanks for the info Hank! Good stuff.
Jack
Tony,
ReplyDeleteIf you look at the YBR returns since the 1st of the year, it is up over 32%.
Not bad for a conservative, prudent strategy.
Joel
Tony,
ReplyDeleteYou always have some good ideas and I make sure I read all your missives; they
are short and to the point. My main gripe with VV is why have they persisted in
issuing Yellow Brick Road calls in an up & down market. I thought that YBR was
started on the premise of assisting prudent investors; since July the strategy
has only amounted to loss after loss.
Vector Vest has a lot of good things going for it and this has been an unusual
year when it comes to timing. Sometimes, like now, it is just better to stay in
cash until we see what shakes out.
Roger
Tony,
ReplyDeleteIt's interesting that you say the confirmed calls are "quite accurate" but yet
you choose not to follow them -- at least not now.
I am actually getting more accurate timing signals using some of the free sites
that others have mentioned on this forum. However, VV can be a good tool for
selecting stocks -- just a little disappointing recently (2009) when it comes to
timing.
BTW, a 15% loss requires an 18% gain to break even...not 30%.
Regards,
Jack
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He is right in 18%. I was thinking loss of 50%
Roger,
ReplyDeleteIn the face of your discouragement, I would like to suggest to you a winning VV
trading plan. It is very simple. Do the following:
1- When the Primary Wave changes from DN to UP, buy 10 stocks from your
favorite long search. Hold for about 5 days then sell everything. Wait for the
next signal.
2- When the Primary Wave changes from UP to DN, buy BGZ. Hold for about 5 days
and then sell. Wait for the next signal.
During periods when the Underlying Trend is UP, you may want to shorten the hold
time of BGZ; watch it closely for signs of reversal.
If you can't make $$$ with this plan, I suggest you abandon VV and take up
checkers.
Rick
---Tony: May not work this year due to the 3 reversals.