I Know First Algorithm: Monthly Review
By Lipa Roitman Ph.D.
January 21 2013
In spite of all the uncertainty with the budget negotiations, the stock market investors had a good month. The market kept rising, as the algorithm was predicting for the last two months. In retrospect, many of the highest flying stocks of this month were the former “dogs” previously beaten to the ground, such as the solar energy stocks LDK Solar (LDK) and Suntech Power Holdings Co. Ltd. (STP), and Alcatel Lucent (ALU).
ALU has risen from 1.13 on December 10, to 1.73 on Jan. 7 per our strong up signals. (See Fig. 1 below).
Each point on this chart was taken from the actual daily forecast published the morning before the next market open. Each forecast contains six different time horizon forecasts, from three days ahead to one year ahead. The charts show the actual price in blue and the signal line in red. The positive or negative (up or down) signals of the forecast were added to the actual last known price at the time of forecast. Thus, when the signal line is above the actual line, it means "buy", if below, then "sell". The widely ranging signals were transformed with a help of an ATAN operator to bring them into manageable scale to fit on this chart.
Citigroup, Inc. (C) went up 12.9 percent since mid December signals. (Fig. 2).
General Cable Corp. (BGC), a weather-vane of the USA industrial growth, had consistently positive long term forecasts ever since the June 26 low of 23.92. Now it has finally risen from Nov. 16 low of 26.36, and stands now at 32.44.
Insurance giant AIG has also been consistently at the head of the forecast table, and it kept adding to its stock price.
What’s next?
The market keeps moving up, and the signals are still up, but the strength of the signals for many stocks has weakened, except for some opportunities. This should be a sign of caution.
