What Is Market Timer TM?
Market Timer is a set of proprietary algorithms that measure supply and demand and the movement of financial market participants to provide unparalleled insights into short, intermediate and long-term stock market movements with a high degree of accuracy and confidence.
Market Timer is delivered as a spreadsheet, updated each day, in the client Portal along with actionable comments and daily signals.
Market Timer measures and quantifies real supply and demand in the market. It can actually visualize the herding activity of market participants on the major stock market indexes.
We created the algorithms that track institutional algorithms
Algorithmic trading by computerized systems rule the markets today. Market Timer exposes the buying and selling activities of market participants on public exchanges from the retail trader all the way to the institutional trader. It does this by using proprietary supply/demand and a volatility algorithms to identify buying and selling activity at a high level. It then uses that information to pinpoint high probability swing points and market anomalies that lead to predicative market scenarios.
Over 25 years of testing, improvements and proven signals
The proprietary algorithms that generate the signals in Market Timer have been developed over the past 25 years, so this is not new or an unproven tool. The original developer of the spreadsheet discovered that there were high, positive correlations between certain internal market data and the closing prices of the DOW Industrial Average and the S&P500. Those correlations have remained stable for more than two decades. We have since added a spreadsheet for the NASDAQ Composite index.
Internal market data correlations are examined in a first layer of data and refined in algorithms on multiple layers to extract daily signals. Intra-day signals are available using our studies for TDAmeritrade’s ThinkorSwim platform. (Some scripts are also available for Trade Station (v10) and NinjaTrader (v8) too).
Quantify supply and demand in the markets
Our algorithms allow our clients to quantify supply and demand, visualize positive or negative herding and track, what we have determined to be institutional buying and selling giving us a powerful look inside what’s really happening in the market unlike any software, charting tool, trading system or quantitative method available anywhere.
The correlations, relationships and anomalies on the spreadsheet is what drives our analysis and provides key insights into actual supply and demand in the markets.
Why Market Timer?
The reason Market Timer was created was to give traders an edge in the market that was not based solely on price action. We call it ‘data-driven technical analysis’.
Data-driven analysis avoids ‘blind spots’ in traditional chart-based technical analysis. 99.9% of traders analyze the markets for trading purposes using ‘price smoothing’ via MACD, stochastics, moving averages, Bollinger Bands, etc. but that’s not what moves markets – price tells you what happened, not what will happen.
The market moves as a result buying and selling activity. That demand (buying) and supply (selling) is driven by market participants who herd in the direction of what they perceive to be the ‘majority’. Humans, as a group, feel ‘safe’ in crowds and follow crowds they have an affinity with. It’s basic human nature – we don’t want to be left out of the group.
As Market Timer’s, we know what the crowd is going to do before it does it. We don’t predict price, we predict the behavior of the crowd that moves the market. We see into market internals, ‘behind the curtain’ if you will and position ourselves ahead of the winning crowd – bull or bear.
Who uses Market Timer
Market Timer is used by professional traders, investment advisors, hedge funds, institutional traders, family offices, prop traders and retail traders who want to dramatically improve their bottom line investment and trading results.
Key to Market Timer’s Success
There’s a famous hedge fund, Renaissance Technologies, founded by the legendary mathematician James Harris Simons who made billions in the market. He is extremely quiet about his quantitative methods and algorithms used. In a rare interview (you can find it on YouTube) he says that his algorithms have one purpose: To find market anomalies and capitalize on them.
This quote from a New Yorker article is especially interesting to us, “Renaissance has had an unprecedented run. Bloomberg Markets, in an article last year, called the firm’s signature product, the Medallion Fund, ‘perhaps the world’s greatest moneymaking machine.’ For nearly three decades, it has gone up by eighty per cent annually, on average, before fees. Renaissance’s other, bigger funds have done less well. Simons said that this is a consequence of their size: large amounts of money cannot be traded as quickly, and longer-term trading makes algorithms less useful. ‘It’s like the weather,’ he says— ‘the nearer in, the higher the certainty’.“
That is true of Market Timer signals too, “the nearer in, the higher the certainty”.
What Data Does It Require To Generate Signals?
The Market TimerTM spreadsheet uses just five core internal market data points that can be manually updated daily or intra-day (or automated using our studies for TOS). Those five data points generate subsets of data used in the algorithms to generate Market Timer signals.
Using only these five data points for each version of Market Timer provides powerful insights. Over time, we discovered which data points were the most critical, most efficient and most effective in generating actionable signals that correlated to future movement and direction of the herd (predicative values).
The data used in Market TimerTM is simple to update on your own – just five pieces of data are required daily to update the spreadsheet and generate the MT signals (intra-day updates can also be helpful).
Those five data points for each version of Market Timer are:
NYSE/Nasdaq Advancing Issues
NYSE/Nasdaq Declining Issues
NYSE/Nasdaq Advancing Volume
NYSE/Nasdaq Declining Volume
Price Change of the DOW Industrial Average®/NASDAQ Composite Index
Manually Updating the Spreadsheet
There are two websites that publish the NYSE internal market data that we recommend:
http://markets.wsj.com – Just scroll down the page until you see “US Stocks – > Market Diary” and select the NYSE data for Market Timer.
Enter the data in unlocked Columns A to F (Nasdaq) and A to G (NYSE) on the spreadsheet(s).
http://www.mcoscillator.com/market_breadth_data/ – If you’re missing more than day of data, you can download a few weeks of internal market data there. On the right side of the page you’ll see a link for “Daily Oscillator Data”. The spreadsheet you download will contain the last 6 months of NYSE internal data and DOW closing values that you can copy and paste into the spreadsheet. The only thing it does not do is calculate the DOW Change, which is done easily by copying the DOW closing prices into a spreadsheet and manipulating the data to retrieve the change.