Commentary, Methodology

5/6/21 Current Signal xHL

The market weakened into the close, but the signal stayed at xHL. The signals haven’t been the primary focus of my work lately.

The tables below shows Signal performance for the 74 Industrial Sector stocks I follow:

There are three Cycles:

  • Upper Cycle= signals xCC, xFC, xCF, and xFF
  • Middle Cycle= signals xLH, xHL, and xMM
  • Lower Cycle= signals x00. x30, x03, and x33

Specter/FF5s does mechanical buys whenever the two hexcodes are the same. That is:

  • x00
  • x33
  • xMM
  • xCC
  • xFF

xCF is also typically a mechanical buy, as it has played well for the past 7 years or so. The upper cycle signals are tricky to call, so lately anything in the upper cycle is considered a hold.

The lower level has not happened for the past 31 trade days.

xHL has been bad for the last 31 days, OK for the 62 days before that and then poor for the 124 days before that.

In the current environment, I’ve been thinking that the narrow ranges, etc. have made the signals relatively unimportant, especially in the Upper Cycle. At some point that view is going to be wrong. There is definitely reason for some concern here.

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