The State is Back
After a month’s break, we’re going to start publishing the free daily State of the Market report again…version 2.
For the uninitiated, the SOTM report is not one of our proprietary strategies. The State is simply a daily snapshot of what some of the simple free strategies we’ve talked about on this blog are saying about the market for the next trading day.
Being without the report for the last month reminded me why we launched it in the first place. Because (a) most readers don’t have the technical wherewithal to follow some of the strategies, and (b) without a central location for readers to see all the strategies in one place, they tend to be dust in the blogosphere wind – I hope the SOTM helps readers to stay focused on things that work.
A Few Changes to the SOTM
First, we did away with the single “aggregate prediction” that combined all of the short, intermediate, and long-term predictions. Folks were way too focused on that single number, but that missed the point of the report.
Unlike the MarketSci strategies which signal very clear and concise trades, the SOTM report has multiple uses depending on the individual investor. Short-term traders (like us) might more heavily weight short-term predictions, expecting to make big position changes daily. Less aggressive investors might focus on the longer-term predictions, expecting to just catch overall market themes. This new report tries to respect that difference.
And second, we tried to make each strategy on the report a bit less “binary”. Generally speaking, when we test ideas on this blog they tend to be either “all in” or “all out”. That’s fine for a proof of concept, but there are usually some pretty simple ways to modify those simple strategies to take a more scaled approach.
For example, rather than just use 50/200-day moving average crossovers for the Golden Cross, we take the average result of 50/150-day, 50/175-day, 50/200-day, close/150-day, close/175-day, and close/200-day variations. In future posts I’ll lay out more specifics re: all strategy modifications.
We’ll be adding a detailed description of how the report is calculated later this week. It’s similar enough in spirit to the old report that I wanted to go ahead and push it out there now sans-details. More to follow.
Filed under: State of the Market Report | 5 Comments