Dancing with the Trend

January 2019

Dancing with the Trend

Pair Analysis

by Greg Morris

I remember following Martin Zweig years (decades) ago and in fact used one of the techniques he described in his book, “Winning on Wall Street,” in the mid-1980s' (1984 to be exact).  In it he described a really simple technique using his unweighted index (ZUPI); trading it on a weekly basis whenever it moved four percent or more.  If it moved up four percent in a week, he bought, if it moved down four percent in one week, he sold.  Positions were held until the next opposing signal – just that simple.  The problem I had back then was not only in not following it as he Read More 

Dancing with the Trend

Bear Markets and Drawdowns - 2

by Greg Morris

This is a continuation of the previous article.  The Dow Jones Industrial Average, also referred to as The Dow by the financial media, is a price-weighted measure of 30 U.S. blue-chip companies. The Dow covers all industries with the exception of transportation and utilities, which are covered by the Dow Jones Transportation Average and Dow Jones Utility Average.  While stock selection is not governed by quantitative rules, a stock typically is added to The Dow only if the company has an excellent reputation, demonstrates sustained growth, and is of interest to a large Read More 

Dancing with the Trend

Bear Markets and Drawdowns

by Greg Morris

The month of December 2018 was a bad month for the market; the rally in the last week of the month was nice but small compared to the month’s decline.  2019 has so far continued the upward move, so I thought it was time to show some data on market drawdowns.  If you have been reading my scribblings for long you hopefully recall that I view drawdowns as the best measure of risk.  Unlike modern finance that says volatility is risk and volatility is defined by standard deviation.  Hey, if you use standard deviation, then you are also agreeing that the markets are random Read More 

Dancing with the Trend

Did 2018 Meet Your Expectations?

by Greg Morris

Welcome to 2019!  I was born in the 1940s and am delighted to be here.  If you were a trend follower with reasonable stop placement, 2018 was a tough year.  If you were a trend follower without reasonable stop placement, you are scared, if not panicky.  If you were a buy and hold investor in most stocks, then 2018 was a somewhat lousy year.  If you were a market timer and always trying to guess the tops and bottoms, 2018 probably wasn’t so great either.  I realize there are many other successful categories of traders and investors, but hopefully my message is Read More