Quote of the Week

August 24, 2011

A market is the summation of the decisions of its participants. Markets are inefficient because the participants are inefficient. Thus, the participant with superior emotional control has a decisive advantage. -Cullen Roche, Pragmatic Capitalism

How does one develop the emotional control to trade in a disciplined manner? I’m sure there are plenty who could delve into different techniques to build up your emotional muscles. However, we prefer just to run things systematically. That way we leave the emotions out of it.

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Posted by Andy Hyer

High RS Diffusion Index

August 24, 2011

The chart below measures the percentage of high relative strength stocks that are trading above their 50-day moving average (universe of mid and large cap stocks.) As of 8/23/11.

After reaching the deeply oversold level of 2% on August 8th, this index has risen some. The 10-day moving average of this index is 13% and the one-day reading is 18%. Dips in this index have often provided good opportunities to add money to relative strength strategies.

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Posted by Andy Hyer