Methods and Strategies
The tables on the signals page are intended to give a condensed summary of current market conditions and direction at the market close for the period indicated. They are best used to identify which sectors are trending or choppy, and to give you an edge when applying your own methods. It only takes a few seconds per day to look over the signal trends, so investors and traders can save time in reviewing a wide range of sectors.
We have additional trading information in our Articles section.
We present our 12 Points signals on a daily basis for the daily and 60 minute chart signals, and on a weekly and monthly and quarterly basis for signals based on weekly, monthly and quarterly charts, respectively. Signals are compiled at the market close (4pm Eastern time) for all time periods.
The system is a purely mechanical representation of bullish strength for the time period using our interpretation of 12 distinct technical indicators and chart patterns, which when added together give measurements reduced to a 0 to 12 scale. To arrive at the final signal, each of the 12 indicators is assigned a one for up or bullish signals, or a zero for down or neutral signals.
The signal numbers presented in the tables are the sum of the up signals with some mathematical corrections. The higher the number, the more bullish the chart signals are indicating. A total number of signals of 0 would be most bearish, a 6 would be neutral to mildly bullish, and a 12 would be most bullish.
The signals are posted after the 4 pm market close on the date indicated. Our goal is to get the daily signals posted within an hour after the close of the regular day session.
The signals show the state of the market at the closing prices on the date indicated. The daily, weekly, and monthly signal tables can show at a glance which sectors are in a trend and which sectors are choppy. By frequently checking these signal trends, the trader or investor can save time when monitoring markets for opportunities.
Be aware that markets are often subject to quick reversals. If you are inclined to trade any of these sectors at the open on the next day, a wise rule would be to check the 15 and 60 minute charts in the morning to see if they are both turning up before making a decision. We believe the signals to be well suited as a starting point and supplement for identifying market trends and strength, to be used in combination with any other trading system.
The listed markets are analyzed by using Exchange Traded Funds (ETFs) to represent the sectors. ETFs are used because they are easily tracked by anyone with a stock brokerage account, or other access to stock charts.
All of the symbols were chosen purely due to their high profiles and relatively high trading volumes in their sectors. No recommendation to trade them is made or intended.
For detailed information on any ETF, go to ETFdb.com and enter the symbol in the search box at the top.
PHYS, Sprott Physical Gold Trust, which tracks the price of gold
PSLV, Sprott Physical Silver Trust, which tracks the price of silver
GDX, VanEck Vectors Gold Miners ETF
USO, United States Oil Fund LP
DBA, Invesco DB Agriculture Fund
EEM, iShares MSCI Emerging Markets
SPY, SPDR S&P 500 ETF
VNQ, Vanguard Real Estate ETF
TLT, iShares 20+ year Treasur Bond ETF
UUP, Powershares DB US Dollar Index Bullish Fund
GBTC, Bitcoin Investment Trust
12 Points Signals
Our 12 Points Signals tables show the bullish strength of sectors at closing prices based on monthly, weekly, daily, and 60 minute charts. You don’t have to start your research by flipping through numerous charts yourself. Our signals give you a quick overview of what the markets are doing in terms of bullish strength.
Simply looking at percent stock price change watch lists for each period (monthly, weekly, daily, 60 minute) is not useful without looking back at recent price action. For example, if we know that the price of our stock was up 2% today that sounds great. However, if it went down 5% yesterday to a new low, then that 2% gain is actually a poor performance. On the other hand if our stock had been up 5% yesterday to a new high, then today’s 2% gain becomes highly significant. You can put today’s action in context by looking at price charts each day, but that takes a lot of time. As an alternative, our 12 Points system puts the price action in relation to chart indicators into a simple number from 1 to 12. These numbers are then placed in tables on our main page each day so you can compare the market strength of the major sectors quickly without having to pull up and compare charts.
Below are charts of GLD and SLV labelled with the 12 Points signals on daily bar charts. These signals indicate the bullish strength of the move for that period.
In the GLD chart above, the daily 12 Points signals are shown above the bars for the last part of the chart. This shows how the signals reflect the price changes in terms of their strength and relation to previous price action. For example, there are 5 bars marked with signal strength of 8 or 9 that each represent new highs on the chart. One would think a new high would merit a 12, but the internal indicators did not agree. In this case it did turn out that the rally was due for a correction later. The signals give an indication of market strength, but are not meant to be used alone as predictors of future price action.
In the SLV chart above, which has the same time frame as the GLD chart, you can see the difference in a more powerful and significant breakout to new price levels. Note also that after the first leg up, the first red down bar has a 7. This high number was due to the closing price remaining elevated compared to recent prices. In the example above, the signals did not forecast the impending correction, so this shows the risk of using these numbers as predictions. They are meant to show the strength of the move for that day. A lot can happen overnight.