Archive for March 27th, 2011

Dogs of the Dow


Michael O’Higgins 1991 strategy proposed that allocation in the ten highest dividend paying Dow components is an approach to beat the business cycle. For us outperformance is not just about dividend as a fraction of price but also about absolute performance. A worst performing asset is a potential outperformer and vice versa.

Higgins made entry in his dividend strategy simple by specifying it as an annual selection. The annual selection assumed a yearly cycle. Unlike annual cycles, Jiseki performance cycles work over multiple degrees of time. So entry for us is linked with the holding period (risk profile) of the investor.  The entry for performance cycles can also be judged visually when the Jiseki cycles turn up.

Now for us the other Dog of the Dow, ProShares Short Dow30 ETF is getting ready to outperform. Not only it’s in the worst 20% among 1000 global composite asset universe over an intermediate period but also the Jiseki cycles are oversold. We anticipate a trading reversal soon on the DOG.

To read more of such updates on subscribe to Orpheus Research Reports.

This article is written for ATMA

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.


Alpha India EE - The Indian Banking sector

Although NSEBANK has broken 11,200 resistances and the structure looks like a valid inverted head and shoulders, we are looking at the current upmove as another minor leg up which should complete near 11,700-12,000 levels. Most of the Indian banks are at high rankings (10 out of 15 are ranked above 80%, 8 out of 15 are ranked above 90%, 14 out of 15 are above 50%). This means that we are waiting for potential short signals among these stocks. Punjab National Bank, Bank of India, ICICI Bank, HDFC Bank, Bank of Baroda, Canara Bank are the best and should start underperforming soon. If you are looking at buying Indian banking stocks, Indian Overseas Bank is the one which could have a larger move up. It is the only one ranked sub 50% and the weekly structure suggests a potential retest of previous intermediate highs.

The Punjab National Bank case

Prices reached 0.382 Fibonacci resistances and previous w circle wave lows near 1,140 levels. The minor structure looks like a completing corrective X wave up which could extend higher till 1,170-1,230 levels. We won’t be surprised if prices turn back from 1,170 levels back to lower levels.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage India: CNX100 traded stocks and Indian Indices.

Michesan Anna-Maria, Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.