Value Line Geometric Index

The american market (I focus on S&P 500) has recuperated 40% of the value since March where it touch the minimum value.

It’s an impressive “come back” while the macro economy data is showing terrible numbers about unemployment, consumption, industrial production….

The economy and the market are driving themselves in the opposite direction. So, so many questions come to my mind:

  • Is the market crazy?
  • is the market completely disconnected from the economy?
  • are we looking at the right numbers?

Well, Mr. Market does what he wants, and we cannot do anything about it. Disconnected from the economy? I do not think so, maybe there is a bubble, but sooner or later it will adjust. Well, my answers are poor, and it’s basically because I have not a concrete answer to these questions.

The last question: “are we looking at the right numbers?” makes me to go to Value Line Geometric Index

Value Line Geometric Index

This index includes all the american market. For more information the Wikipedia.

“All companies in the Value Line Composite Index are publicly listed on one of the major exchanges listed below. The number of companies in the Value Line Composite Index fluctuates based on factors including: the addition or delisting of the companies on the exchanges themselves, mergers, acquisitions, bankruptcies, and the coverage decisions made by Value Line for the Value Line Composite Index. Value Line’s decisions as to which companies to include are undertaken with the intention to create a broad representation of the North American equity market.

Exchanges in The Value Line Composite Index are:

  • American Stock Exchange
  • NASDAQ
  • New York Stock Exchange
  • Toronto Stock Exchange

Well, comparing the VALUG (blue) with SPX (red), you can see that Value Line Geometric Index is more closed to the reality that I had in mind that is that we still have not recuperated.

If we look the comparison of the indexes from February 12th, the result is that draw-down is bigger for VALUG, and that the recuperation is below than S&P:

To do: I will add this index to my reviews, I have first to learn from it.

Counting drilling rigs

Background

I have the purpose of counting US drilling rigs that are producing oil. I understand so many of them are closing and the cost to re-open them should be considerable. With the amount of oil in the market and the future prices sinking into even negative values, I want to challenge my self if I can improve the way to analyze and predict when the barrel price is going to bull again.

US drilling regions

These are the main drilling regions in US.

  • Permian
  • Anakardo,
  • Appalachia,
  • Niobrara
  • Eagle Ford
  • Haynesville
  • Bakken

Sources of data

I only found a place that offers directly the number of opened drilling rigs in a chart. And it’s just for Oklahoma (Anakardo). It’s this one: https://ycharts.com/indicators/oklahoma_inland_rotary_rigs

Some other sources:

  • List from TCI Business Capital: it only provides data from time to time.
  • List from North Dakota: just for this region, which belongs to Bakken region
  • Quandl.com: it has no data on active drilling rigs.

to do: find more data.

 

 

 

SPX Vs DIX 2020 follow-up

I have started to follow-up the Dark Index Vs SPX, as one of the indicators I follow during the decisions. Right now it’s in test mode, as I have to learn about what happens and see if I can build some type of correlation that contributes in a positive way to my trading actions.

So, let’s start.

First chart (January 1st – April 30st)

When DIX is up, it’s assumed the whales are buying in a silent way. Some trends:

  • February 27th
  • March 24th

Coronavirus and S&P

It is the first time that I have a situation like this while studying indicators like these ones, so I am going to document what is going on.

The starting snapshot

4 weeks after the historical highest SPX when was at 3400 points this is what happens.

Initial view

  1. The McClellan oscillator seems to decrease the fall, in theory it begins to draw a divergence, which to me it still needs a few days to confirm.
  2. The “strong hand” sales volume is supposed to be decreasing, but the SPX is still down.

Things to watch:

  1. The US senate, congress and the FED agree;
  2. the impact of the COVID-19 in US.

To be updated soon…

My triple screens layers (by Alexander Elder)

In the book The New Trading for a Living,  Alexander Elder describes an useful and mechanic way to analyze and filter opportunities for investing: triple screen.

The 3 layers have a main purpose these are:

  • Top screen                 = censorship purpose.
  • Intermediate screen   = determine if there is an opportunity
  • Bottom screen           = refine the short

What do I check on each screen?

Top screen

  • Time frame = Weekly and daily
  • Support and resistance
  • Konkorde indicator (by blai5)
  • EMA(200), EMA(50), EMA(20)
  • Gatillo indicator (by Miguel Larrañaga)

Intermediate screen

  • Time frame = daily
  • Bollinger bands
  • EMA(200), EMA(50), EMA(20)
  • Volume Price Confirmation Indicator (by LazyBear)
  • Squeeze Momentum Indicator (or “SQZMOM” by LazyBear)

Bottom screen

  • Time frame = hour and 15 minutes
  • Double Bollinger Bands (by blai5)
  • Moving Average Convergence Divergence (MACD)
  • Gatillo indicator (by Miguel Larrañaga) (being evaluated).

Continuous improvement (to do list)

things that I’m evaluating or I need to do:

 

 

Actions to promote the book

This is a to do list for the promotion of the book.

V2MOM

As usual these are the goals following the V2MOM model:

  • Vision: promote DREAM methodology for savings and investment.
  • Values: have fun, learn a lot, great design take care of visual engagement.
  • Method: Build a blog and content with all ideas, tools, mechanisms schemes…
  • Obstacles: Time.
  • Measures:
    • Have the site ready for people that are willing to use the materials.

Not started,

Working on,

  • Participate regularly in forums or groups.

Done,

  • Build a blog.
  • Create a logo.
  • Look for a template for the flyers.
  • Reorganize the steps to learn.
  • Create a logo and banners.
  • Add advertisement, with no big impact.

Notes