 |
 |
 |
 |
 |
 |
 |
|
 |
|||||||
|
|||||||||||||||
|
Market Research Services
To non-participants, technical analysis tends to mean "charts", in turn implying the attempt to employ pattern recognition in order to predict the near term likely outcome. There may very well be practitioners who can drill out profits from such analysis - RFA does not belong to their number. To us, all that seems highly subjective, so we do not look for heads with shoulders or double bottoms, flags, ascending triangles or island reversals. We do not do pattern recognition. Instead we quantify the technical action of lists of stocks ("universes") into quickly usable form. What "style" is currently performing? Is there evidence that the performance is waning in favour of another "style"? And which stocks conform to those "styles"? Aristotle had his "eureka" moment in a bathtub. For Joss it was in a Virgin Atlantic A340 from JFK to Heathrow in 1999. The reason no one set of indicators works with consistent reliability is because the subjects under scrutiny (equities, bonds, currencies or commodities) change the way in which they behave. If you can monitor this change of status reliably, you can vastly increase the odds of selecting the correct implement from the toolbox. The analysis can be utilized over various time frames - for hedge fund "pairs" trading we employ shorter-term horizons using weekly and daily data. For other investors - institutional funds for example - we use a synthesis of monthly and weekly data. The analysis can be used with absolute price or with relative price. Superficially, it might seem that relative price analysis is of more relevance to "long only" institutional portfolios but the "secrets" revealed by relative strength analysis are, in practice, of equal utility to those with shorter term horizons as well. The chart above shows a glimpse of our methods. The green squares represent when the item is acting cyclically and the red circles when it is trending - either up or down. And we always acknowledge the source of stimulus for our ideas
- in this case, the work of Welles Wilder's Directional Movement
Index was an invaluable source of inspiration.
|
||||||||||||||
|
|||||||||||||||
 |
 |
||||||||||||||
