Dancing with the Trend

Building a Rules-Based Trend Following Model - 11

by Greg Morris

I’m going to continue discussing the ranking and selection of issues for trading.  I cannot possibly go into great deal on each of the ranking measures I have used over the years, but future articles will discuss some of the more important ones. Mandatory Measures Once you have your collection of ranking measures, you need to determine which are to be used along with the rules and guidelines (future article) as mandatory ranking measures.  This means that you predefine the value range that they must be in before you can purchase that ETF.  This is necessary to keep the Read More 

Dancing with the Trend

Pullback Rally Analysis

by Greg Morris

The Pullback Rally Analysis is not a ranking measure but a technique for determining the relative strength of issues by looking at the most recent rally from a previous pullback.  Measure the amount of the pullback in percent, then measure the current rally up to the current date in percent.  The concept is fairly simple, those issues which dropped the least in the pullback, will probably outperform in the following rally.  This concept measures the percentage move during the pullback, the percentage to date of the current rally, and the percentage to date from the beginning Read More 

Dancing with the Trend

Distribution

by Greg Morris

Distribution is the term often referred to as the topping process in the stock market.  Before we go any further I want to say this loud and clear:  I am not calling a top in the market.  As you hopefully know by now I am just a humble trend follower.  Calling tops and bottoms in the market is generally left to the market timers and those who never trade; only analyze.  Distribution got its name from the fact that stocks are being distributed from the smart hands to the not-so-smart hands; or so I have heard.  These are nasty periods in the market; very Read More