Happy New Year fellow investors. Before we start our posts for 2024, we thought it was a good time to share a little background on how this got started.
As you may know we soft-launched this site in late 2023 and are just getting started. But why this site when there are so many high-quality charting tools with sophisticated technical indicators? Frankly, it was born out of frustration.
We’ve been power-users of some of the best-in-class commercial technical analysis tools for some time and yet we still seemed to be spending an inordinate amount of time experimenting with, combining, and interpreting all the necessary signals and chart patterns to review and analyze many stocks. We were looking to simplify, normalize, and automate the analysis. Our background is in Computer Science and Data Science so we were well equipped to dig in and translate the underlying statical formulas into our own models. We analyzed dozens of combinations of complex technical signals and arrived at a proprietary combination that we like for assessing longer-term trend reversals and scored the signal strength on a scale of 0 to 5, and finally generated our own daily charts. The signal score distills multiple indicators into something we could look at quickly to assess both long-term direction, duration, and strength. We then used some AI predictive models on historical price and volume action for each individual stock to arrive at a predictive forecast a few days ahead of where the signal score is likely to be.
We had been using these charts for ourselves for many months and found they helped provide the clarity we were looking for to make more informed decisions. We decided to make them available on the web to share with family and friends, and the now the public to view.
Like you, we are investors, not day traders. The technical signals we configured are calibrated for longer term trends (several weeks or months) and are not suitable for day traders. We expect our investments to fluctuate and even expect them to go down in the short-term, but we understand that over-time, price action and volume provide insight into money flows. Large institutional investors drive a significant portion of the trading in the markets. These institutions include pension funds, mutual funds, insurance companies, and hedge funds. When the big guys decide to build a large position in a stock, those purchases are often spread over several weeks or more. This leaves clues. We know that we cannot reliably predict future price points, but it sure does help to have some clarity on what is happening directionally to make more informed decisions.
A final reminder that these charts are not financial advice. The indicators should not be the sole decision criteria and should not be applied blindly. Rather think of these charts as just another tool in the toolbox. Always do your own analysis or consult a professional. And, as Warren Buffet has said, make sure you are investing in quality businesses that you would be glad to own for 10 years.
Wishing you a healthy and prosperous 2024.
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