Recording of FREE 90-minute AIQ Zoom meet on September 7, 2023.
In this 90-minute session, Steve Hill, CEO of AIQ Systems looked at Market Timing based on Sector Rotation + David Wozniak of TFR will cover a Mid-Year Market Forecast
Please note due to recording issues the first 5 minutes of the session has some external noise.
Tuesday our intraday snapshot revealed groups were strong still, but the Expert System showed weakness in stocks – we can profit while markets are still open.
We downloaded the snapshot midway through the trading day, ran our reports and right off noticed the AI Expert Rating system on stocks showed far more down ratings than up. The groups were still strongly up.
This video shows what we saw mid morning 9-10-19
The fastest way to browse hundreds of charts end of day is back with a vengeance. AIQ TradingExpert Pro has always been known for its ability to browse hundreds of daily price charts at blizzard speeds (one of the many unique features in the platform).
The fastest way to browse hundreds of charts end of day is back with a vengeance. AIQ TradingExpert Pro has always been known for its ability to browse hundreds of daily price charts at blizzard speeds (one of the many unique features in the platform).
Also includes historical data on US and Canadian stocks updated every night and Mutual Fund NAVs updated each night.
How do traders use this powerful data?
PLUS all the powerful features of AIQ TradingExpert Pro end of day including
AND TradingExpert Pro also includes:
Also includes historical data on US and Canadian stocks updated every night and Mutual Fund NAVs updated each night.
AND ALL AT OUR LOWEST PRICE FOR YEARS
The 2018 updated SP500 Group and Sector structure for TradingExpert Pro is now available
This completely updated structure is current through the end of December 2018. Many sectors and groups have been renamed by S&P and the new structure reflects these changes. The old SP500 structure in your program will be replaced if you choose to install the update.
The complete install and further instructions are available at http://aiqsystems.com/sp500_update_2019.html
The SP500 structure in AIQ Charts and Data Manager showing new group and sector naming shown below
(click to enlarge)
Figure 1 – Four major market averages with 200-day moving averages (Courtesy AIQ TradingExpert)
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Figure 2 – Four market bellwethers with 200-dqy moving averages (Courtesy AIQ TradingExpert)
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Figure 3 – S&P 500 Index Monthly Method Trigger Points (Courtesy AIQ TradingExpert)
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Figure 4 – Dow Jones Industrials Average (top) and previous warnings from ticker VWIGX (bottom)(Courtesy AIQ TradingExpert)
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Figure 5 – 10-year treasury yield minus 2-year treasury yield (Courtesy: www.StockCharts.com)
Figure 1 – CANE/DBA/GDX/GLD (courtesy AIQ TradingExpert Pro)
Figure 2 – JJOFF/PPLT/SLV/UNG (courtesy AIQ TradingExpert Pro)
Figure 3 – URA/UNG (courtesy AIQ TradingExpert Pro)
Figure 4 – Buy Low Composite Index (courtesy AIQ TradingExpert Pro)
When you create an index for a group of tickers, you can display a chart of the index as well as the underlying tickers. A group index can be analyzed on charts using technical indicators, and Expert Ratings are generated for the group index (except for mutual fund
groups).
The procedure for creating an index for a group of tickers is as follows:
To create an index for a group of tickers, follow the steps below.
First, create a group ticker:
1. First, add a new group ticker to your Master Ticker List. Select the
Ticker command on the menu bar. Then select New to display the
New Ticker dialog box.
2. Enter a ticker for the new group, then be sure to enter the proper
Type designation (group or mutual fund group).
3. Click OK, and the second dialog box for entering a new ticker
appears.
4. Type in a name (Description) and the First Date for data. The
remaining default settings on this second dialog box can remain the
same.
5. Click OK and the group ticker is added to your Master Ticker List.
Then, create a list to insert the group ticker into:
1. Select the List command on the menu bar.
2. Select New on the drop-down menu and a dialog box appears.
3. Type in a name (8 characters maximum) in the text box.
4. Click OK and the list name appears in the Selected List text box
located on the toolbar.
5. The list name is also displayed in the List window. Insert the group
ticker from your Master Ticker List under the list name. To insert a ticker directly under a list, do the following:
6. Next, insert tickers into the group. To insert tickers into a group:
Under the new group, insert all of the tickers that will make up the
group by doing the following:
7. Finally, compute the index for the new group. To compute a group index:
Figure 1 – Ticker BAL (Courtesy AIQ TradingExpert)
Figure 2 – Ticker GDX (Courtesy AIQ TradingExpert)
Figure 3 – Ticker JO (Courtesy AIQ TradingExpert)
Figure 4 – Ticker SGG (Courtesy AIQ TradingExpert)
Figure 5 – Ticker SWN (Courtesy AIQ TradingExpert)
Figure 6 – Ticker UNG (Courtesy AIQ TradingExpert)
Figure 7 – The “Lows” Group (Courtesy AIQ TradingExpert)Adding groups and sectors to your Group/Sector List
If for some reason you want to add to the Group/Sector List delivered with the system, TradingExpert Pro provides the necessary functions.
The procedure for adding to your Group/Sector List is as follows:
1. Add any new stocks to the Master Ticker List
2. Add new group tickers to the Master Ticker List.
3. Add new sector tickers to the Master Ticker List.
4. Add new sectors to the Group/Sector List. Under each new sector, insert the groups that will make up that sector.
5. Add new groups to the Group/Sector List. Under each new group, insert the stocks that will make up that group.
6. Use the Compute Group/Sector Indices function to compute indices for the new groups and sectors.
7. Use the Set RS Symbols function to set relative strength relationships.
Can a ticker be entered in more than one group?
TradingExpert Pro allows you to enter a ticker in more than one group. For example, you may want to follow an index of locally-owned companies by placing them in a newly created group. One of those companies could be a computer software development company that you would want to include in an industry group of computer stocks. You can enter an equity into as many user created groups as you want, but it is important that you do not enter these user created groups into sectors. Only principal industry groups should be collected into a sector.
Adding a new sector to your Group/Sector List
Proceed as follows:
1. First, add a new sector ticker to your Master Ticker List. Click the Ticker command on the menu bar. Then click New to display the New Ticker dialog box.
2. Enter a ticker for the new sector, then be sure to enter the proper Type designation (sector).
3. Click OK, and the second dialog box for entering a new ticker appears.
4. Type in a name (Description) and the First Date of data. The remaining default settings on this second dialog box can remain the same.
5. Click OK, and the new sector ticker will be added to the Master Ticker List.
6. Insert the new sector ticker into your Group/Sector List by doing the following:
• Display the Group/Sector List in the left (List) window by choosing its name from the Selected List text box on the toolbar.
• Highlight the new sector in the Master Ticker List by clicking on its name with your mouse.
• Again using your mouse, click the name of the master sector in the List window.
• Select the Insert Ticker(s) command on the List sub-menu or click the Insert to list toolbar button.
7. Before inserting groups under the new sector, be sure to create any new group tickers and add them to the Master Ticker List.
8. Insert all of the groups that will make up the new sector by doing the following:
• Select in the Master Ticker List all of the groups you want to add by simply holding down the Ctrl key while clicking each group.
• Again using your mouse, click the new sector in the Group/Sector List under which you want to insert the groups.
• Select the Insert Ticker(s) command on the List sub-menu or click the Insert to list toolbar button.
Adding a new group to your Group/Sector List
Follow these steps:
1. First, add a new group ticker to the Master Ticker List. Click the Ticker command on the menu bar. Then click New to display the New Ticker dialog box.
2. Enter a ticker for the new group, then be sure to enter the proper Type designation (group).
3. Click OK, and the second dialog box for entering a new ticker appears.
4. Type in a name (Description) and the First Date of data. The remaining default settings on this second dialog box can remain the same.
5. Click OK, and the new group ticker will be added to the Master Ticker List.
6. Insert the new group ticker into your Group/Sector List by doing the following:
• Display the Group/Sector List in the left (List) window by choosing its name from the Selected List text box on the toolbar.
• Highlight the new group in the Master Ticker List by clicking on it with your mouse.
• Again using your mouse, click the sector in the List window under which you want to insert the new group. If the list is fully contracted, you may need to use the Expand Level command on the List sub-menu to display all of the sectors.
• Select the Insert Ticker(s) command on the List sub-menu or click the Insert to list toolbar button.
7. Before inserting stocks under the new group, be sure to add any new stocks to your Master Ticker List.
8. Insert stocks by doing the following:
• Select in the Master Ticker List all of the stocks you want to add by simply holding down the Ctrl key while clicking each stock.
• Again using your mouse, click the new group in the Group/Sector List under which you want to insert the stocks.
• Select the Insert Ticker(s) command on the List sub-menu or click the Insert to list toolbar button.
Computing indices for a new group or sector
Following your next data retrieval, the group and sector indices will be automatically computed. However, when you add a new group or sector to your Group/Sector List, and you want to see an analysis at once without waiting for your next data retrieval, you can use the Compute Group/Sector Indices function to create the index.
To use Compute Group/Sector Indices:
1. Click Utilities on the Data Manager menu bar to display the drop-down menu.
2. Select Compute Group/Sector Indices from this menu. The Compute Group/Sector Indices dialog box appears.
3. In the Source section, click the option button for Selected Group(s) Symbols, then select your new group or sector in the text box. Check to compute both Parent and Child symbols.
4. In the Range section, select the first option, Update from Last Date of Data.
5. Choose OK. The computation will begin.
6. After you have computed group/sector indices, you should execute the function Set RS Indicators.
Setting relative strength relationships
This function sets your relative strength indicators to conform with parent/child relationships. Then, when you are working in Charts, you can easily see the relative strength of the stock vs. its parent group, a group vs. its parent sector, or a sector vs. the master sector.
To set Relative Strength Indicators:
1. Click Utilities on the Data Manager menu bar to display the drop-down menu.
2. Select Set RS Symbols. Then select Set RS Tickers. The Set RS Tickers dialog box appears.
3. Click the name of your list in the Selected Lists text box.
4. Click the first option, Set Relative Strength Relationships (overwrite).
5. Choose the OK button.
Building a new Group/Sector List
If for some reason you would want to build a new Group/Sector List, first create a new list and master sector, then follow the procedure above for adding groups and sectors to the list.
In my last piece I note that the U.S. stock market presently stands alone in terms of recent performance. While virtually every major U.S. stock market average has run to new highs in the last several weeks, not one other individual country has really even come close. While this might induce spontaneous chants of “USA, USA”, the truth is that this may not necessarily be a good thing.
This current disconnect will likely be resolved in one of two ways:
Jay Kaeppel
Chief Market Analyst at JayOnTheMarkets.com and AIQ TradingExpert Pro ( AIQ Systems) client. http://jayonthemarkets.com/
The markets have been shall we say been less than inspiring recently. Brexit came and went with a brief hiccup in the action and only in the last week or so has the volatility picked up. The Dow as you can see in this weekly chart is back the same level as December 2014
The VXX shows clearly the decline in volatility since the high back in 2011
The summer doldrums may be over, but during periods when the market is range bound, segments within the market are often performing very well or very poorly. One AIQ Report that can show the strength within segments is the Relative Strength Strong – Short Term. This report shows stocks in 3 month trend up and is a great report for those who trade with ‘the trend is your friend’. Here is Friday 9-16-2016 report. The report is ranked by the stocks with the best trend.
I highlighted 6 stocks in the top of this report. All have good trends in place, and all in the Oil and Exploration S&P 500 group. The group has performed quite well recently. The top 2 OILEXPO stocks CHK and DVN have both had a small pullback to their uptrend line. We’ll see how they do this week.
Index Methodology Overview
This paper was prepared to assist subscribers/investors with an understanding of the investment concepts behind the construction and use of the FATI® Sector/Group Index.
Key Concepts
Data Dependence
The investment world is more data dependent today than ever before. This applies to both technical or fundamental data. The individual stock universe is comprised of approximately 16,000 stocks, of which 8,000 have quasi-reliable technical and fundamental data available. Even a universe of 8,000 stocks is extremely large and very hard for any investor to manage.
One of the risks with large amounts of data, of any type, is its quality. If we use low quality data, it could create incorrect outputs used in your investment decision process. There is an old adage that applies here and most have heard it before: Garbage In – Garbage Out. The quality of data and the ability to manage this data is paramount in the investment management process.
Sector/Group Structure
Many of the available Sector/Group Indices have, what is called, ‘limited participation’. Some of the industries groups contain only one or two stocks. The FATI® Sector/ Group Index is designed to maximize the number of issues in each industry group. For example, a major index provider has an index with 60 industries and an average of 8.3 stocks per industry. If you look closely you will find over 10% of the industries are comprised of only one or two stocks. Hardly a representative sample. The FATI® Sector/Group Index averages over 44 stocks per industry and no less than 6-7 stocks on average in an industry group. This gives investors a more accurate representation of each industry. The index also broadens the number of sectors from the industry average of 10 to 17 sectors. This was done to improve the granularity of the index and make it easy to identify investment opportunities.
Influential Factors on the Markets
It is a well-known fact approximately 90% of the volume in the equity markets come from institutional investors. These investors include mutual funds, pension plans, insurance companies and hedge funds Due to the large size of the portfolios they manage, it may take weeks, if not months; for them to build a position in a stock. Remember, these investors try to buy or sell in a stealth manner to avoid tipping their actions and having the price pushed up or down before they have finished acquiring or disposing a position.
Since institutional investors have such a significant influence on the market, it only makes sense to focus on the stocks they watch and trade. We conducted a poll to determine if there were a common, and simple, set of criterion which could be used to narrow a list of over 8,000 stocks. At the same time, try to determine what the average investment manager’s universe of stocks is comprised of. Institutional analyst’s standards are high when it comes data requirements. If those standards are missing from the data of a company, they won’t consider the company for investment potential. Remember Data Dependence from above. ‘Garbage In – Garbage Out’.
The Search
The Poll and Results
The poll was conducted from a random list of investment managers. Armed with the data collected from the investment managers a plethora of test screenings were performed. Each screening was reviewed to determine the data available, data completeness and data quality, both fundamental and technical. After exhaustive testing, a final list of criterion was selected. The final screening using the selected criterion was performed and compared to several investment manager’s universe of stocks. The results showed, on average, the final screen captured 86% of their universe of stocks. Some higher some lower.
Below is the final criterion used in the construction of the FATI® Sector/Group Index.
The index is updated once a month using the criterion listed above. In any given month as many as 20-300 stocks may be added and/or deleted from the index. The number of issues in the index has ranged between 2,500-3,000 stocks. By narrowing the number of stocks in this manner, the fundamental and technical data was more plentiful, more accurate and more complete.
Putting it All Together
Knowing the key concepts and the criterion used in the construction of the FATI® Sector/Group Index, let’s put it all together and answer the question.
The index provides investors with:
1. a list of stocks institutional investors watch and trade.
2. a higher quality Sector/Group structure for better investment decisions.
3. market capitalizations ranging from Mega Caps to Nano Caps.
4. the elimination of low priced / low quality stocks with poor quality data.
5. simple maintenance of the index and fundamental data. Download and Use.
One Last Thought
There are two generally accepted approaches to investing. Fundamental and Technical. Which is better is not up for debate here, but instead consider the following;
Fact, the majority of institutional investors purchase companies based upon strong fundamentals and earnings.
Professional Traders focus on technical indicators, patterns and news events to determine when to buy or sell a stock.
First, use the FATI® Sector/Group Index to focus on the stocks institutional investors are watching and trading. Next, screen for companies in the Index with strong fundamentals and earnings. Lastly, use technical analysis to determine when to buy or sell the fundamentally screened stocks.
