- Fear index to bear phase; unconfirmed. (VIX)
- Treasury long-term bonds to bear phase with weak confirmation. (TLT)
- Crude oil to bull phase with no confirmation, but it may be near. (USO)
- U.S. dollar to bear phase against the Loonie; confirmed (USD/CAD).
- Changes:
- NKE moved from Earnings Plays to Zombies (as an unsuccessful trade I'm trying exit).
- PAYX moved from Earnings Plays to Other Bull Plays.
My holdings are marked with an asterisk (*). Signal dates are the first day of week in which the signal appeared. Slow trade holdings are listed separately, at the ending of this posting.
Indicators
Stocks and Rates
pps | pfe trend | pfe loc | |
---|---|---|---|
SPY | |||
QQQQ | |||
VIX | |||
TLT | |||
JNK |
Oil and Gold
pps | pfe trend | pfe loc | |
---|---|---|---|
USO | |||
GLD |
Global
pps | pfe trend | pfe loc | |
---|---|---|---|
EUR/USD | |||
USD/JPY | |||
EEM |
Forex
pps | pfe trend | pfe loc | |
---|---|---|---|
EUR/USD | |||
AUD/USD | |||
USD/CAD | |||
USD/JPY | |||
GBP/CHF | |||
GBP/USD | |||
EUR/JPY | |||
AUD/JPY | |||
USD/CHF | |||
NZD/USD | |||
USD/MXN |
Watchlists
Earnings
pps | pfe trend | pfe loc | |
---|---|---|---|
AAPL | |||
CHRW | |||
ENTR | |||
INTC | |||
LRCX | |||
TROW | |||
VAR |
Key to earnings plays
(sorted by earnings date)
sym | roe | debt/ equity | div% | ex-div | earns |
---|---|---|---|---|---|
INTC | 24.3% | 0.05x | 3.3% | feb3 | jan13 |
AAPL | 35.3% | 0.00x | jan24 | ||
LRCX | 30.9% | 0.01x | jan24 | ||
TROW | 21.8% | 0.00x | 1.7% | dec28 | jan24 |
VAR | 28.4% | 0.03x | jan26 | ||
CHRW | 44.8% | 0.00x | 1.5% | dec16 | jan31 |
ENTR | 21.3% | 0.00x | jan31 |
Other bull plays
pps | pfe trend | pfe loc | |
---|---|---|---|
AROW | |||
CVX | |||
D | |||
EPD | |||
FTR | |||
MVO* | |||
NLY | |||
PAYX* | |||
SO |
Key to other bull plays
sym | roe | debt/ equity | div% | ex-div | earns |
---|---|---|---|---|---|
AROW | 14.9% | 0.58 | 3.6% | mar | jan17 |
CVX | 17.4% | 0.10 | 3.3% | feb | jan28 |
FTR | 3.8% | 1.55 | 8.0% | mar | feb21 |
MVO | 81.6% | 0.00 | 7.0% | jan | |
NLY | 8.2% | 6.42 | 15.0% | dec | jan |
PAYX | 34.6% | 0.00x | 4.1% | jan | dec21 |
SO | 13.5% | 1.18 | 4.8% | jan | jan24 |
Diversification plays
pps | pfe trend | pfe loc | |
---|---|---|---|
EPI | |||
EWZ | |||
FXI | |||
RSX | |||
VWO |
Key to diversification plays
sym | underlying |
---|---|
EPI | India |
EWZ | Brazil |
FXI | China |
RSX | Russia |
VWO | Global |
Zombies
pps | pfe trend | pfe loc | |
---|---|---|---|
AOD* | |||
FNMA* | |||
MCO* | |||
NKE* |
Key to zombies
sym | roe | debt/ equity | div% | ex-div | earns |
---|---|---|---|---|---|
AOD | (fund) | 11.3m% | dec22 | n/a | |
FNMA | feb | ||||
MCO | 1.5% | feb | feb4 | ||
NKE | 20.8% | 0.06x | 1.4% | feb2 | dec21 |
About the categories:
- Earnings plays: I think these are likely to rise sharply on a real or anticipated earnings surprise.
- Other bull plays: I think these are more likely to rise than fall; excludes earnings plays.
- Bear plays: I think these are more likely to fall than rise.
- Diversification plays: These don’t closely track the U.S. markets or are based on currencies other than the U.S. dollar.
- Zombies: These are failed leftovers from what seemed to be good ideas at the time. They stalk the Watchlist like zombies, tying up resources and frightening small children.
Abbreviations:
- pps - Person's Proprietary Signal.
- pfe trend - Trend of the polarized fractal efficiency line.
- pfe loc - Location of the polarized fractal efficiency line.
Key to the PPS/PFE tables
column | color | meaning |
---|---|---|
pps | bull phase | |
bear phase | ||
pfe trend | uptrend | |
no trend | ||
downtrend | ||
pfe loc | above +50 | |
0 to +50 | ||
below 0 to -50 | ||
below -50 |
PPS/PFE Analytical Tools
The analysis uses the daily Person's Proprietary Signal (pps), developed by John Person.
This is a black box signals -- the "proprietary" means that Mr. Person knows how it works under the hood, and I don't. But it has shown a fair degree of success in identifying good entry and exit points, and I find it useful.
For confirmation, the analysis uses an indicator called the polarized fractal efficiency (pfe) technical tool. It uses the fractal math of Benoit Mandelbrot to measure how efficiently move between levels. The higher the efficiency, the more directional the price trend.
The math for the pfe is public knowledge, but it is well above my math knowledge, and so to me is also a black-box signal.
This is a relatively new technical tool, based on fractal math. Investopedia has only a cursory explanation. Wikipedia is silent on the subject. ThinkOrSwim has a fuller explanation.
PPS/PFE Trading Rules
These rules are very preliminary. I’m still trying to figure out how the polarized fractal efficiency signal works.
When Person’s Proprietary Signal (pps) is in bull phase, enter when the polarized fractal efficiency (pfe) line crosses the zero line in an uptrend trend) A pps signal and pfe uptrend have less strength but greater upside potential when the pfe location (pfe loc) is below +50, and greater strength but less upside potential when the pfe location is at or above +50.
When the pps in in bear phase, enter when the pfe trend crosses the zero line in a downtrend. The set up has less strength but greater downside potential when the pfe loc is above -50, and greater strength but less downside potential when the pfe loc is at or below -50.
How should the pfe line be treated when it has flatlined at either end of its range, around +100 or -100. My preliminary observations are that the price by then has had a large run and tends to present a picture of exhaustion. However, by the description of the pfe, a high level should indicate a continued strong trend.
This is something that I’ll figure out as I go along.
Disclaimer
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
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