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 In Step #2 of the Tutorial, we
discuss calculation and assembly of Stock Configurations. Stock Configurations
are combinations of moving averages which help us articulate whether it is time
to Buy, Sell, Short, or Cover an individual stock by illustrating where the
stock is going in relation to where it has been (i.e., direction).
Each week, after we have determined the Market Stage and assembled
the Stock Configurations for each stock in our Universe, we look for Sell
Configurations among the Long positions in our portfolio. We do this by
comparing the stock's configuration against the Sell Configurations shown in the
table for the appropriate Market Stage. If a Long position in our portfolio has
a matching Sell Configuration, we Sell our entire position in that stock.
| Market Stage 1
- Uncertain, but probably just a Bear Market rally |
|
15wk
- UP or DOWN
5wk
- UP or DOWN
|
| Market Stage 2
- Uncertain, but possibly the 1st sign of a new Bull Market |
40wk
- UP or DOWN
5wk
- UP or DOWN |
or |
15wk
- UP or DOWN
5wk
- UP or DOWN |
| Market Stage 3
- Bullish: We are experiencing Bull Market conditions |
40wk
- UP or DOWN
Price of the stock
- UP or DOWN
15wk
- UP or DOWN
5wk
- UP or DOWN
|
or
|
40wk
- UP or DOWN
15wk
- UP or DOWN
Price of the stock
- UP or DOWN
5wk
- UP or DOWN
|
| Market Stage 4
- Uncertain, but possibly the 1st sign of a new Bear Market |
40wk
- UP or DOWN
Price of the stock
- UP or DOWN
15wk
- UP or DOWN
5wk
- UP or DOWN |
or |
40wk
- UP or DOWN
15wk
- UP or DOWN
Price of the stock
- UP or DOWN
5wk
- UP or DOWN |
| Market Stage 5
- Bearish: We are experiencing Bear Market conditions |
15wk
- UP or DOWN
5wk
- UP or DOWN |
|
