www.robertwcolby.com
Technical Market Indicators
Dow Theory, W.D. Gann, MetaStock, system tester, indicator builder, custom formulas, momentum, overbought, oversold, buy, sell, signals, top, bottom, Bull, Bear, consolidation, sentiment, contrary opinion
December 4, 2023
Preview from my weekly report*
Our clients are avoiding losses and preserving their capital, while we analyze and weigh the evidence every day, carefully calculating probable reward relative to probable risk. We offer complete transparency, anytime access to your funds, and low fees. You keep control over your money. See: ColbyAssetManagement.com
Curb your enthusiasm.
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The emotions of the trading crowd are always swinging from greed to fear and back again in an endless cycle. After stock prices rise for few weeks in a row, the majority of stock traders feel increasingly bullish. This is evident now: sentiment indicators have swung from Fear in October to Greed now. Stock prices bottom on Fear and top out on Greed, leading traders to sell low and buy high. That is why most traders lose money. We have seen these swings repeatedly over the past 2 years, even though stock prices have made no net progress and still languish below their highs of January, 2022. It is far too easy to get caught up in these manic-depressive episodes. It is human nature to be swayed by the crowd, the popular narrative, the latest news and rumors. We strive to offer you an objective discipline that affords a rational perspective on the most relevant facts, so that you can conserve and grow your wealth. Federal Reserve Chair Jerome Powell spoke at a fireside chat at Spelman College in Atlanta on Friday. He seemed pleased that the rate of inflation rate has come down and the economy so far seems to be having a soft-landing instead of a recession. The trading crowd took that as bullish, while ignoring Powell warnings, “It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so." The Fed’s monetary policy remains restrictive and the path forward is not at all clear. Data from the Federal Reserve shows that the Fed is still contracting its balance sheet and the rate of change of the money supply is still very negative. Interest rates remain high and their direction from here is uncertain. Many banks still appear vulnerable, with large unrealized losses when assets are marked to market. Unrealized losses on securities held by US banks exploded by 22% in the third quarter. Irresponsible government deficit spending remains out of control, exacerbating risk of inflation pressure over the long term. Stock prices remain overvalued. Overall risk (including war risk, which is the worst kind) remains high. Looking under the surface of the stock market, many divergent technical trends are evident. Caution appears warranted. Every day, we use technical, fundamental, and quantitative analysis to judge the Reward/Risk probabilities of trend continuation or reversal. We strive to control risks and to make sure that all of our clients are safe and protected from large losses. If you want to earn reasonable returns while avoiding large losses, move your wealth to our professional fiduciary asset management. We always put our clients’ best interests first, and we are always here to help you in times of stress. We are always happy to discuss your goals and concerns and answer all your questions. |
11-Year Outperformance by the
Top 10 Exchange Traded Funds
Weekly Rankings of Major Trend Relative Strength
My weekly Top 10 ETFs ranked by the Major Trend Relative Strength outperformed the S&P 500 by over an 11-year period of real-time weekly tests. Click here for a graph of simulated performance.
Please note that my ETF rankings are available by subscription--NOW WITH A NO-RISK FREE TRIAL.
See The Colby Global Markets Report (click here).
My latest book was named one of the top investment books by Stock Trader's Almanac 2005. This book also received an excellent review in the November 2003 issue of Futures.
My ETF Rankings are not investment advice. Rather, they are an objective ongoing research study.
Analysis of market forces may offer a sense of probabilities. But the many variables that can impact market prices are notoriously difficult to predict. And, market analysis is something less than an exact science. So, sound trading tactics are always recommended. See my Money Management Rules.
According to CFTC Rule 4.41, hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Trading and investing involve risk of significant loss. Your use of this site means that you have read, understood, and accepted my Disclaimer.
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Preview Colby's Latest Book:
The Encyclopedia of Technical Market Indicators, Second Edition, 2003.
Dow Theory Analysis
Gann Angles Analysis
Update on EMA Crossover Signals
Money Management Rules
How To Become A Top Trader.
Ranking Indicator Performance to Maximize Profit by using
"Annual Relative Advantage".
Ranking Indicator Performance by the "Profit/Loss Index".
Robert W. Colby, CMT,
is a consultant to institutional and private investors and traders, providing regular analytical reports, custom research services, and trading systems tailored to clients' objectives. Clients include the most successful traders and investors in the world. Robert is the author of The Encyclopedia of Technical Market Indicators, Second Edition, McGraw-Hill, 2003, which has become the standard reference for indicator and trading systems design. Previously, at several large Wall Street firms, Robert worked as a proprietary trader, technical analyst, and fundamental analyst. He also was adjunct professor at New York University and New York Institute of Finance, where he developed new courses on technical analysis and market timing.
Robert W. Colby is a Chartered Market Technician (CMT), an accreditation granted to members by the CMT Association (https://cmtassociation.org/) after demonstrating professional competence and ethics over a period of many years. Robert has been a member since 1980, and he strongly supports the CMT Association's high standards. He also supports the The Technical Analysis Educational Foundation (https://www.taeducation.org/about/), which works to have technical analysis included in the curriculum of major business schools. "The CMT Association is the national organization of investment analysts, stock market analysis professionals, and certified market technicians in the United States."
Robert W. Colby is America's foremost authority on testing market indicators."
--Bill Meridian, top-ranked investment analyst and international fund manager, www.billmeridian.com
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Ranking ETFs
"Robert Colby has evolved a system that, while hardly foolproof, is pretty clever," wrote Daniel Fisher, "Surfin' ETFs", Forbes, Investment Guide, Special Issue, June 4, 2007.
Please click here to view this article.
INTERVIEW of Robert W. Colby in Technical Analysis of STOCKS & COMMODITIES magazine, December 2006 issue.
Please click here to view this article.
"Gold's next move: History, logic, and intermarket relationships. See if testing gold's relationship to different markets over a 32-year period provides possible trade signals for the yellow metal."
by Robert W. Colby, CMT.
Please click here to view this article.
"Which gold indicators are best? Divining gold's next move."
by Robert W. Colby, CMT.
Please click here to view this free article.
"Applying the Relative Strength strategy to ETFs."
by Robert W. Colby, CMT.
Please click here to view this free article..
"PUTTING CANDLES TO THE TEST, How Profitable Are They Really?" by Robert W. Colby, CMT. Published in SFO, STOCKS, FUTURES AND OPTIONS MAGAZINE, Volume 5. No. 8. August 2006, pages 91-94. Please click here to buy this article. (Scroll to bottom of linked page.)
TradingMarkets.com interviewed
Robert W. Colby, CMT.
View the entire interview online.
Active Trader magazine September 2004 interviewed Robert W. Colby. 4 pages. "Robert W. Colby: Technical collector. A discussion with Robert W. Colby about technical trading and his revised Encyclopedia of Technical Market Indicators, Second Edition. By Active Trader Staff."
For information about methods that would have performed substantially better than systematic trend-following in back-testing simulation dating back 32 years, email me by clicking on the following link:
Please click here to contact Colby directly.
Click here for a simulated performance graph of one of my trading systems applied to a stock price index.
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