stockbee: How to use Guppy MMA to gauge market strength

Monday, July 13, 2009

How to use Guppy MMA to gauge market strength

Daryl Guppy uses a set of two EMA's to guage a trend and strength of trend. MMA stands for Multiple Moving Averages.

Short Term EMA

3 5 8 10 12 15

Long Term EMA

30 35 40 45 50 60

Using that you can create two scans to find stocks in confirmed uptrend or downtrend

Guppy MMA uptrend scan

XAVGC3 > XAVGC30 AND XAVGC5 > XAVGC30 AND XAVGC7 > XAVGC30 AND XAVGC10 > XAVGC30 AND XAVGC12 > XAVGC30 AND XAVGC15 > XAVGC30 AND XAVGC3 > XAVGC35 AND XAVGC5 > XAVGC35 AND XAVGC7 > XAVGC35 AND XAVGC10 > XAVGC35 AND XAVGC12 > XAVGC35 AND XAVGC15 > XAVGC35 AND XAVGC3 > XAVGC40 AND XAVGC5 > XAVGC40 AND XAVGC7 > XAVGC40 AND XAVGC10 > XAVGC40 AND XAVGC12 > XAVGC40 AND XAVGC15 > XAVGC40 AND XAVGC3 > XAVGC45 AND XAVGC5 > XAVGC45 AND XAVGC7 > XAVGC45 AND XAVGC10 > XAVGC45 AND XAVGC12 > XAVGC45 AND XAVGC15 > XAVGC45 AND XAVGC3 > XAVGC50 AND XAVGC5 > XAVGC50 AND XAVGC7 > XAVGC50 AND XAVGC10 > XAVGC50 AND XAVGC12 > XAVGC50 AND XAVGC15 > XAVGC50 AND XAVGC3 > XAVGC60 AND XAVGC5 > XAVGC60 AND XAVGC7 > XAVGC60 AND XAVGC10 > XAVGC60 AND XAVGC12 > XAVGC60 AND XAVGC15 > XAVGC60

Guppy MMA Downtrend Scan

You can create a similar scan for downtrend.

How can you use these scans to find market health? Look at % of stocks in uptrend and % of stocks in downtrend.

As of yesterday 30.35% of stocks in Worden universe were in uptrend.

As of yesterday 34.37% of stocks were in downtrend.

On 12 the June 71.33% of stocks were in uptrend and only 10.84% in downtrend. In last one month there has been a sharp correction which is eflected in those breadth numbers.

Members Feedback

Pradeep,

What attracted me most was your take on trading - "most important starting point for successful trading is methodology and methodology trumps markets". I have learned a lot and greatly benefited in all aspects of trading since joining the member's only site - specifically:

1. Market breadth (market monitor) : Your market monitor method to identify when to enter the market for trading and when to sit in the sidelines. Along with market monitor, your explanation on other important market breadth indicators has helped me not only in trading, but also take wise decisions in other investment accounts (eg. IRA funds).

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Thanks,
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I have been trading the stock market for over 20 years with varying degree of success. Some years I made tons of money and in others I lost plenty. I always liked technical analysis and most of my buys were based on break outs on high volume. Some of them worked and many did not. Mostly because my timing of the market was wrong and the reason for the buying (and selling) was more a matter of chance than having solid logic behind it.

Over the years I have subscribed to various services and none of them was satisfactory. I kept switching from one to another looking for the golden fleece. I have been Stockbee member since October 2007. Your site is the first one to provide me with clear and concise method to time and execute trades.Your market timing system (Market Monitor) and your explanation and guidance in developing systematic trading method is more accurate and better than all. And best of all, you are not using a black box analysis, everything you do and the logic behind is in the open.

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Los Angeles, CA

Dear Pradeep -

I have been a member of your blog for several months now. I have been trading and have experimented with many things. However, I have found your approach to be most sensible.

Specifically -

A) Your Market Monitor framework for market timing is very robust. I have gone back and studied market monitor signals in last couple of years (I am still studying them in fact). This framework gives very good signals ahead of major market turns. Moreover, this framework gives signals in long and short time time frames which allows you to trade accordingly. Example - market monitor gave a "get out of the market" signal on 09/09/08 last year and "get in the market" signal on 03/18/09 this year

B) You also put your comments on your interpretation of Market Monitor signals that is very useful for members because its not just the numbers but the meaning of these numbers which is of importance

C) You approach to find individual stock ideas with strong stop loss discipline is keeping your members out of trouble. And the beauty is, you combine your market monitor signals with individual stock ideas so you can go on offense or defense accordingly

D) Also, your responsiveness. I have seen you answer EVERY question from the members. You have all kinds of members and you answer all of their questions and that brings them up to speed with your trading style

To sum it up, I don't think there is a comparable product / service available in the market place that offers the kind of value that you offer. Thank you so much Pradeep for your work and your offering.

Robin

Dear Pradeep,

I have been a member of the Stock Bee Blog for over a year now. I have been trading stocks for the past 10 years and was a broker with TD Ameritrade. I can honestly say that I have learned more from you and your blog in the past year than I learned in the past 10 years trading on my own. I have subscribed to numerous newsletters, blogs, and trading services over the past 10 years. None of them even come close to the methods you have developed.

In my opinion, your methods are truly revolutionary! In fact, of all the trading methods I have ever tried, only your methods have been significantly profitable. Your customer service to your members is absolutely first class! You have responded to every single e-mail that I have ever sent you and have done so in a timely manner.

Becoming a Stock Bee member has been the best decision I have made in my trading career. Thank you Pradeep!”

Dale

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Monday, July 13, 2009

How to use Guppy MMA to gauge market strength

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