Market Monitor is a breadth based market timing system. I use it primarily to decide which market phase is favorable for my style of breakout trading and which period should be avoided. I also use the Market Monitor to time long term retirement account (401k) fund allocation.
I developed Market Monitor in the beginning of 2001. The impetus for developing the market monitor was couple big draw-downs after big profits. Prior to Market Monitor I often used to run up my account a lot during bull moves , but end up giving up lot of those profits during bearish periods. In 2001 I decided to do something about it. .
The process of developing Market Monitor started with an exhaustive study of commonly used market timing methods. I read every book, article, research study in public domain on market timing. I spent thousands of dollars on books and data and hundreds of hours and many sleepless nights till I found what I wanted. Everyday morning I would start work on this, experiment with hundreds of things and nothing would work. Everyday evening I would go for a long run near Princeton Lake, generate new ideas, come back and work on it till late in the night and next day the cycle would repeat. Basically for four months I had only one obsession in life, market timing.
After hundreds of failed attempt I finally found a workable method. Most of the original models is intact since 2001. Over the years I have fine tuned it a bit but core logic is same. Since then I have avoided all major bearish moves successfully. Long standing members of the site who have been following this model since my public blog started will tell you how they avoided the worst bear market in history by using Market Monitor. There are several members who have built their own databases to monitor this information and many have refined and enhanced the model over the years.
Once I started the blog I started publishing the figures on the blog and from that the spreadsheet evolved. Earlier I use to only look at the data daily and not maintain a running data series.
When you study market timing you will soon discover that there are two camps. Those who believe market cannot be timed and those who believe market can be timed. Essence of speculation is in market timing. Speculators throw market studies and extreme development of skills have developed workable tools to time the market.
The commonly used models used for market timings are based on:
The Market Monitor is based on market breadth. In 2001 I used a 40 years data of market breadth and found some data patterns which indicate likely start and end of a bull move. Other people have done similar studies and have developed variety of Market Timing models based on market breadth. One of the advantage of market breadth models over other models is it uses internally developed data points from market moves to decide market direction. As against that let us say you have market timing model based on length of skirts women wear, then the data point used in external.
In 2001 when I developed by Market Timing model my goal was very clear: to avoid big draw downs. I knew that I could make big money by holding on to gain. So I was looking at a overall filter which will tell me when to trade my breakout kind methods and when to sit out. That is the basic objective of Market Monitor even today.
The basic logic behind Market Monitor is that breadth extremes happen at turns and moves are confirmed by breadth cross over. Market Monitor measures the breadth of major moves in market as against other commonly used breadth measure which tends to be noisy. Market Monitor daily measures breadth of various magnitude and duration move.
Market Monitor generates two types of signals: market extremes signal and market turn signal. In a bull market at some stage the market reaches a breadth extreme as measured by Market Monitor. That indicates likely turn zone or topping zone. Similarly in bear market at some stage market reach breadth extreme. That indicates likely turn zone or bottoming zone. Such extreme signals are often early indicator and actual topping and bottoming can be delayed by few weeks to few months.Rallies which start from such extreme levels tend to be major rallies lasting 8 to 12 months and result in market going up 20% plus. Extreme turn signals on end of day basis are rare. Often a bull or bear market reaches extreme in intraday basis and reverses. The second kind of signal Market Monitor gives is confirmation signal. It is indicated by breadth cross over. Breadth cross over signal safe periods for breakout trading.
All he data used for Market Monitor is derived using Telechart and the scans used for it are as follow:
4% plus daily
(100 * (C - C1) / C1) >= 4 AND V >= 1000 AND V > V1
4% plus down daily
(100 * (C - C1) / C1) <= ( - 4) AND V >= 1000 AND V > V1
25% plus quarter
100 * ((C + .01) - ( MINC65 + .01)) / (MINC65 + .01) >= 25 and AVGC20 * AVGV20 >= 2500
25% plus quarter
(100 * ((C + .01) - (MAXC65 + .01)) / (MAXC65 + .01)) <= ( - 25) and AVGC20 * AVGV20 >= 2500
25% plus month
C20 >= 5 AND (AVGC20 * AVGV20) >= 2500 AND 100 * (C - C20) / C20 >= 25
25% down month
C20 >= 5 AND (AVGC20 * AVGV20) >= 2500 AND 100 * (C - C20) / C20 <= ( - 25)
100 * ((C + .01) - ( MINC34 + .01)) / (MINC34 + .01) >= 13 AND 100 * (C - C20) / C20 <= ( - 25)
(100 * ((C + .01) - (MAXC34 + .01)) / (MAXC34 + .01)) <= ( - 13) AND 100 * (C - C20) / C20 <= ( - 25)
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
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
Data generated from these scans is fed in to a spreadsheet and in some cases a further value is derived using simple calculations. In second part I will look at how each of the Market Monitor column is interpreted
Are you serious about your trading?
If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.
It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.
Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.
Why traders come to stockbee?
The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial and no tall claims of making you instantly wealthy, and yet the site attracts new members everyday. Members come from all walks of life and all kinds of trading size and trading styles.
You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.
Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.
What will I learn in the members site?
The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.
As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.
You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.
You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.
You will learn about Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.
You will learn about Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.
You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.
You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.
You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.
You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.
You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.
You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.
You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.
The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.
The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.
If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.
Do you have a trial?
If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.
It is for those who are ready beyond the trial phase and ready to put serious months or years of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.
The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.
How can I become a member?
To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.