Category Archives: Market Ratio

Recent Thoughts

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Market Ratio Review

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The Market Ratio: April 2023 #MarketRatio

At the end April, our market barometer reverted back to upper limit. Such action suggested that we should focus on small-cap. Continue reading

The Market Ratio: January 2023 #MarketRatio

In October 2022, our internal market barometer suggested that we focus on large-cap or blue chip companies. At the end of December 2022, we started to see a shift in that barometer. Continue reading

NLO Market Indicator–November 10, 2022

The market had one of the largest daily gain since 2020 today with the S&P rising 5.5% and the Nasdaq jumping 7.3%. Such action pushed S&P 500 above the most recent high of 3,900 in late October. Below is the current view of our Dow Theory Indicator and NLO Market Score ®. Continue reading

The Market Ratio: October 2022 #MarketRatio

Our team introduced the concept of Market Ratio back in 2020 as a barometer to oscillate between blue chip vs speculative stocks. After some careful consideration and backtests, we’ve determine that this simple, yet effective strategy, has outperformed the S&P 500 by 3.5% on an annual basis. Continue reading

NLO Market Indicator–September 16, 2022

The market fell another 5.8% this past week and has lost over 9% in a month. Continue reading

The Market Ratio: December 2020

Since our last posting on the Market Ratio on August 13, 2020, the Dow Jones Industrial Average has increased approximately +7.40%.

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However, this wasn’t the payoff based on our work of August 13, 2020.  As seen below, the payoff has been a gain of nearly 3x what the DJIA had achieved in the same period. Continue reading

The Market Ratio

In doing some research, we came across a ratio that we thought was very interesting.  For now, we’ll call it the Market Ratio. For us, the Market Ratio says everything that encompasses the goal of generating returns that are beyond that of the S&P 500 Index.  The Market Ratio is charted below from September 10, 1987 to August 7, 2020.

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As seen below, the compounded annual growth rate generated by using the Market Ratio over the entire period in question is +14.28% for the LEADER strategy versus using the LAGGARD strategy at +1.66% and  compared to the S&P 500 index compounded annual growth rate of 10.63%.

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Below we detail the specifics which, on paper, seem to generate these exceptional returns. Continue reading