All Ords Index.

[Phaedrus]

"The SP500 Index will provide good confirmation of any significant weakness in the AllOrds Index". As you can see from the chart below, the SP500 has not as yet "confirmed" the current AllOrds weakness. This is very interesting because the two indices generally move pretty much in tandem, often triggering on the same day. While it is not uncommon for the SP500 to lead the AllOrds, the reverse of this is unusual.



I have proved (at least to my own satisfaction) that SP500 MSI signals applied to the AllOrds Index are, overall, more profitable than MSI signals derived directly from the AllOrds. This, of course, is not to say that SP500 derived signals are invariably better than AllOrds derived signals, but backtesting over many years shows that they are more profitable overall, as discussed in post #62 on page 5 and post #88 on page 6 of this thread.

[Footsie]

so are you saying that because the sp500 has yet to trigger a red weak, that we should not be overly concerned that the All Ords is red? so hold off the selling ?

[sharer]

so are you saying that because the sp500 has yet to trigger a red weak, that we should not be overly concerned that the All Ords is red? so hold off the selling ?

It's your money ... you are going to have to decide. Good luck !

[beacon]

Interesting charts and insights Phaedrus and Hoop. Thanks. Regards ASX 200, the mining tax size in the backdrop of relentless OCR rises is denting ossie confidence. Was it the last straw?
Currently confident that this dip is artificial, at least for SPX 500, and will not last long. Europe is creating and abetting drama, yet the silent march to global recovery proceeds on regardless. Accumulating. Time will tell, as always ...

[Footsie]

It's your money ... you are going to have to decide. Good luck !

Really, i was hoping you could hold my hand

[trackers]

Looking from the American point of view the VIX (Volatility index) shows no panic...possibly just another speed bump
.

Interesting Hoop, cheers.. Not sure those MA indicators are useful for much in this particular case?

[Phaedrus]

So are you saying that because the SP500 has yet to trigger a red weak, that we should not be overly concerned that the All Ords is red?

I think you should be concerned to some degree because this does denote obvious measurable weakness in the Aus market, but in the absence of equivalent US weakness it must have somewhat less significance. We have no way of knowing how good this individual signal will be - all we can do is backtest this indicator to see how well it has worked in the past. The easiest way to do that is to treat the Index as if it were a stock and "trade" it as such. The signals giving the most "profit" are considered to be the most accurate. Here are some backtest results :-

Standalone AllOrds MSI signals gave an average annual gain of 13.1%.
Generating both AllOrds and SP500 signals and acting on whichever one fired first :- Average annual gain 18.4%.
Using only SP500 derived signals and applying them to the AllOrds :- Average annual gain 20%.
By way of comparison, Average Buy/Hold annual gain over the same period was 7.8%.

...... so hold off the selling ?

How you choose to react to these signals (if at all!) is entirely up to you, Footsie. It's your dime. There are some people here on ST who regard a red AllOrds as signifying a good time to buy, for example. For myself, market weakness like this means that I must act on all Sell signals (and I have been getting plenty of those lately). It also means that, for me, buying is proscribed. Each to his own though eh? It all comes down to individual opinion in the end, but I am always happier if I can demonstrate a logical basis for my decisions, some statistical evidence that the odds are in my favour. It is very easy to prove that the best time to buy is when the index is light green, for example. Unless, of course, you are a devout contrarian, in which case such evidence counts for nothing!!

[Hoop]

Interesting Hoop, cheers.. Not sure those MA indicators are useful for much in this particular case?

Hi Trackers...probably right..also on a long term chart different setting would be preferred to get any useful information from them.
Normally, I don't post with either of them. This seems to be the default option for StockCharts.com. This time I was in a hurry and didn't remove them

[fihr]

Well I have used the latest chart to sell my medium term losing positions which were waiting upon a slower moving exit signal, and to sell my sideways positions which weren't generating exit signals otherwise either - but there was no incentive to hold onto them in a red market. However, I have kept my profitable positions, which have held up well so far, and put some stops on them (not normally a part of my exit signals, but in a very weak market, worth adding). In my longer term portfolio, I'm just making sure I act on any exit signals at the moment.

Thanks Phaedrus for posting the charts. I am also very interested in the SP500 correllation/lack of.

The uncertainty caused by the Krudd tax will hang over the mining sector until its determined for sure, but its interesting to see how many stocks with operations overseas are also being sold down a bit.

[remy]

going to be another crazy sell of today, especially for the banks.. some good opportunities in the large caps for sure