FAQs Frequently Asked Questions
Q: I'm having a bit of difficulty understanding the "Market Timing Results" as published on your website. Using the latest couple of signals as an example: The chart says there is a sell signal on 1-31-11 which I take to mean that the model sells on the open of 1-31-11. Your emails confirm that the sell signal was issued at the close on 1-28-11 so that would indicate to sell on the open on 1-31-11. The model then switches to a buy on 2-1-11, confirmed by your email on 2-1-11, which I take as a signal to buy on the open of 2-2-11. I'm showing the Nasdaq composite opening at 2693.30 on 1-31-11 and opening this morning at 2744.68. That would be a loss of 51.38 for that period or -1.91% for the period as opposed to the -2.52% that you show on your chart.
A: The signals can occur either before, during, or after the trading day. For signals that occur outside of market hours, we take the closing price of the prior day to keep things consistent. This means should the market gap down on a buy signal, the closing price would slightly penalize the model. Conversely, should the market gap up on a sell signal, the closing price would slightly favor the model. Over time, these slight differences tend to even out.
The sell signal on 1-31-11 was taken when the NASDAQ Composite fell below 2686.89, rounded down to 2685. Unfortunately, the market started rallying shortly after this point. It's never nice to see, but it does happen, and fortunately, not often.
The buy on 2-1-11 was sent during market hours, so we took the exact price of the NASDAQ Composite and TYH at the time the report was emailed out.
|First published:||2 Feb 2011|
|Last updated:||12 Sep 2011|