This post was recently published on ZYX BuyChange Alert.
Confluence of indicators shows that major opportunities are ahead.
In every instance where this confluence has been seen before, a major buying opportunity has occurred within the next 120 days. Based on the confluence we are embarking on a new plan.
The plan will include the following:
- A list of the top stocks to buy
- Appropriate buy zones to maximize profits and minimize risk
- Proper timing of purchases
- Lifting of existing hedges
- Raising more cash so that more powder is dry to take advantage of upcoming opportunities
The Open Secret
The open secret to generating wealth is simple — buy low sell high.
Unfortunately, human psyche is such that most investors tend to buy when stocks are high and then they panic when the stocks are low; this is an all too common losing pattern.
The winning pattern is to be patient, willingness to buy when stocks are low, willingness to sell when the stocks are high, and the discipline to do nothing when the market conditions are not right.
Our models are designed to enforce the foregoing discipline.
Background
Our models are very data intensive. They are feed the following data that focuses on change:
- Economic data from 23 countries
- Macro trends
- All major currencies
- All major commodities
- Geo political considerations
- Technology/Science developments
- All major industries
- 3000 U.S. stocks
- 1000 International stocks
- Trends in bonds all over the globe
Our main model is ZYX Global Multi Asset Allocation Model. This is an adaptive model, i.e., the model automatically changes with market conditions.
At present the following are the key ingredients of our timing model.
- Aggressiveness of fund flows
- Leading global economic indicators
- Commodity price movements
- Relationship between currencies
- Risk appetite as demonstrated by the relationship between the price movements of the assets deemed safe vs. assets considered speculative.
- Price action of the markets at key technical support/resistance levels
- Price action of the markets as various classical technical patterns become apparent
- Changes in internals of the markets as the prices push through or fail at key support/resistance levels
The model makes two adaptations in near real-time to the eight inputs as new data becomes available.
First, the weight of an input is low if the data has been choppy or directionless. However, if the data offers strong direction, regardless of the magnitude, the weight of the input increases. Second, the weight of an input changes based on its correlation with the price movement of the underlying market.
