Waves.India does it again, delivers 79% accuracy

This is the third year in a row we have delivered above 70% accuracy. After we got the Mar 09 low, Tech Reversal, BSE metals buy, buy despite terror attacks, 79% accuracy should not surprise. Moreover, the move up from Mar 09 low till May 09 high was one way. We admit that the move from May 09 onwards was tricky. We have not witnessed such large corrective formations. Time is always new and original, there is never a same time, though it (time) could be similar. Despite the confusions around May 09, how did we come out unscathed? The rules are very simple. Never fall in love with a forecast and be fast to admit a mistake. The earlier we expect that market is doing something other than what we expect it do, faster we can understand the next intermediate trend. This approach helped us not to question the unrelenting rocket in technology. This kept us on the broader trend.

There is another thing we would like to mention. Markets have infinite alpha, if systems could trade every tick. But owing to liquidity, costs, slippages and effort, alpha seems finite. Markets were up 70% for the year, but one could have traded up legs and down legs and generated more than 70% net gains. The quest to gain more has a tradeoff. The more alpha one tries to generate, the more error prone the work gets. Behaviorologists don’t agree that traders, fund managers, researchers can generate more than the market return. Last two years, we generated more than the net market returns. This time we targeted an absolute move of 83% and manage to capture 66%. This was the same as the market return.

We have measured accuracy on intermediate time forecasts. All Waves India reports mention levels. It’s the levels, which judge how accurate we are. We have pulled out the levels along with the trends and compared forecasted with actual. An average actual intermediate move was 8% large. The market letter captured average 5% of the 8% move. This gives us an accuracy of 79% for the year. We have detailed out the reports, the dates, the Sensex levels and have tabulated all of them in a tracker.

Enjoy the India Accuracy report.

ACCURACY.INDIA.REPORT.20110.PART-I

ACCURACY.INDIA.REPORT.20110.PART-II

ACCURACY.INDIA.REPORT.20110.PART-III

ACCURACY.INDIA.REPORT.20110.PART IV

ACCURACY.INDIA.REPORT.20110.PART-V

*Waves.India will not be published this week on Thursday.

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‘Performance cycles’ is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

ORPHEUS INDIA RESEARCH

WAVES.IND is a perspective product published on Tuesday and Thursday. The report highlights Indian Stock Market top sectoral Indices and Sensex (BSE 30) viz. BSEOIL, BSESC (Small Cap), BSEMC (Mid Cap), BSEHC (BSE Health Care), BSEPHARMA (Pharmaceuticals), BSECG (Capital Goods), BSEBANK (Banking), CNXIT (Technology), BSEFMCG (FMCG), BSEAUTO (Auto) etc.. The product also covers all the 30 Sensex components. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers.

COVERAGE: REUTERS RICS. INDICES. .BSEBANK, .BSEOIL, .NSEI, .BSECG, .BSESN, .BSEAUTO, .CNXIT, .NSEBANK, CITc1, IFc1, .NSEBANK

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