What is the MMSignal?

MMSignals Historical Correlations

How can MMSignal be an Market Indicator?

MMSignals Expansions

MMSignal Expansions

When the MMSignals model is applied to a sector or an ETF, it generates a specific signal for that sector or ETF. The MMSignal for a specific sector or ETF works in the same manner as in the case of the S&P 500 index. The MMSignal for the S&P 500 index, in fact, can be considered as the specific signal for SPDRs (SPY). In addition, we track the most popular ETF’s covering the broad market and specific sector, i.e., DIA, QQQQ, nine Sector Spiders, GLD (a gold ETF) and TIP (a bond ETF). An example below shows the MMSignal for the Material Sector Spider (XLB).

Similar to the case of the S&P 500 index, the MMSignals for sectors or ETFs can be very useful to investors as they also detect the peaks and bottoms of the sectors or ETFs well.

When the MMSignals model is used for an individual stock, it becomes a pure technical indicator. Below is an example for Microsoft (MSFT). You can easily see that it is one of the best technical indicators. It is worth noting, however, that the MMSignal model is different for individual stocks compared to the index because our model cannot digitalize the panic level for individual stocks (we do not know who else can either). As a result, we do not highly recommend its use for individual stocks, especially these with little liquidity. If you need a complete database for an individual stock, please write us at info@mmsignals.com.

As you can see, we would have taken some defensive actions on MSFT in late November 2005. Another example is Shanda Interactive Entertainment Ltd. (SNDA) as shown below. As its MMSignal high in the alert area and yet still trending higher, we consider the risk/return ratio is too high to buy back into SNDA at the time of the analysis (late November 2005).

What is the MMSignal?

MMSignals Historical Correlations

How can MMSignal be an Market Indicator?

MMSignals Expansions

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