Wednesday, January 07, 2009

Trading Coach Blog and Other Wednesday Potpourri

* Trading Psychology Resource - As you browse through the new Trading Coach blog, you'll see that I'm developing it into a resource archive for traders. During 2009, there will be theme-based linkfests, as well as supplemental resources for the new Daily Trading Coach book, which is due out in March. Once I've posted the Best of TraderFeed posts for 2008 (all "best of" posts will be archived to the new site, as well), I will return to writing my free online book, "An Introduction to Trading." The free book will focus on trading methods and will be written one post/chapter at a time.

* Twenty-Day Strength - Tuesday was notable in that we had 3289 new 20-day highs across the NYSE, ASE, and NASDAQ, as opposed to 119 new lows. New 65-day highs were less elevated: 632 vs. 55 lows. That is the highest level of new 20-day highs that we've seen since I began collecting these data in September, 2002. Interestingly, since that time, we've had 42 occasions in which new 20-day highs have exceeded 2000. Twenty days later, the S&P 500 Index (SPY) was up 30 times, down 12 for an average gain of only .01%. Across all other occasions, the average 20-day gain was .19% (936 up, 590 down). Interestingly, when we conduct a median split of the occasions when 20-day highs were strong based upon whether 65-day highs were elevated or not, we see a difference. When 20-day highs *and* 65 day highs have been elevated (N = 21), the next 20 days in SPY have averaged a gain of 1.65% (18 up, 3 down). When 20-day highs have been elevated but 65-day highs have not (as was the case yesterday), the next 20 days in SPY averaged a loss of -1.62% (12 up, 9 down). This reflects worse outcomes when 20-day highs spike during longer-term bear market conditions.

* Attention Bloggers: Twitter Links - I continue to encourage bloggers to send me URLs to posts that would be of special relevance and uniqueness to TraderFeed readers, so that I can link via Twitter. (My email address appears under the "About Me" section of the blog page). Among the posts of particular interest would be those related to trading psychology; research-based posts; and posts with unique analytical content/perspectives. Over 1500 traders now subscribe to the Twitter service, and a larger number of readers pick the posts off the blog page. This provides me with a way of linking to--and recognizing--the good work out there. Thanks, and thanks also to readers who send me interesting article links that they stumble across!
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2 comments:

tight-rope trader said...

Dr. Brett,
do you still use the same basket of stocks per sector:

Materials - DD, DOW, AA, IP, WY
Industrials - GE, UPS, BA, UTX, MMM
Consumer Discretionary - CMCSK, TWX, HD, DIS, MCD
Consumer Staples - PG, MO, WMT, KO, WAG
Energy - XOM, CVX, COP, SLB, OXY
Health Care - PFE, JNJ, MRK, LLY, AMGN
Financials - C, AIG, BAC, WFC, JPM
Technology - MSFT, INTC, IBM, CSCO, VZ
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Brett Steenbarger, Ph.D. said...

Hi,

Yes, I've stuck with the same basket over time.

Brett