2014 LEV Leader Performance

[Riskslayer]

hi

What is the basic idea behind LEV Ladder?
How you are taking trade decision using it?

thx
CS

Hi-

The basic principle is that consistent buying of a name by institutions (as represented by LEV) over a 20d look back period is indicative of future returns. If you look at the real time LEV chart for a the stock BBD for a 20d period, you will see the green line (LEV) forms a pretty linear line from lower left to upper right.

The 2400 names are scanned each night to pull out the names that exhibit this characteristic.. Tonight, only 52 names of the 2400 met this criteria.. which is relatively few.. usually there are closer to 100 names that make it through this scan.

Next, the 52 names will be ranked by 3 month RS to find the fastest movers .. Marketsmith does not update their database until late, so I look at this the next morning.. The top 4 names are selected from this ranked ordered list with a minimum cut-off of RS >= 95; so, occasionally, there are fewer than 4 names that meet that RS = 95 or greater criteria.

These are each day's LEV Leaders, and this list is maintained for a rolling 5d period to capture overnight gains, etc.

I hope that helps,

Shawn

PS: let me know if you have further Q's.

[Riskslayer]

Hi-



Shawn

[csayantan]

hi

Can we Use it with AltoGOM / LTPack?
Can you provide us the code for LV Leader ?
If you share the Ninja Trader 7 code we may try to see its performance on the thin/thick market on NSE/BSE(Indian Market)?

thanks
CS

[Harry]

... Next, the 52 names will be ranked by 3 month RS to find the fastest movers .. Marketsmith does not update their database until late, so I look at this the next morning.

Hi Shawn,

Isn't the RS calculation simply a performance metric vs. S&P500? Couldn't this step be automated to help omit the reliance of MarketSmith?

Harry

[Riskslayer]

hi

Can we Use it with AltoGOM / LTPack?
Can you provide us the code for LV Leader ?
If you share the Ninja Trader 7 code we may try to see its performance on the thin/thick market on NSE/BSE(Indian Market)?

thanks
CS

Hi CS-

I do not code on these platforms.

I also do not provide my s/w to others for a variety of reasons, but Pascal has a process for providing LEV code for a few different platforms that may be of assistance for you. Please contact Pascal regarding this request.

Shawn

[Riskslayer]

Hi Shawn,

Isn't the RS calculation simply a performance metric vs. S&P500? Couldn't this step be automated to help omit the reliance of MarketSmith?

Harry

Hi Harry,

You are in general correct, but I believe the IBD RS calculation is slightly different in that it weighs recent weeks more heavily in the RS calculation than the other weeks. This probably does not significantly affect results.

I could further automate things as you suggest, but using MS is fast/easy for this part of the process; is well recognized/trusted in the community (so, results can be compared easily); and MS provides fast/easy access to other data/information that I like to consider in my trading, e.g. avg daily $ traded, quick access to industry groups for names that are unknown to me, etc.

I hope all is well with you,

Shawn

[Riskslayer]

Hi-



Shawn

[Riskslayer]

Hi-

I do not usually make observations here, but the recent strength in Latin America seems noteworthy and not widely discussed. PBR, BBD, BRFS, & TEO all appeared this week as LEV Leaders, and the ETF ILF was a lower RS name that did not make the RS cut to be an LEV Leaders, but it has a constructive LEV pattern. The price patterns of these names remind me a little bit of JO and CORN last quarter.. consult those charts for how bottoms can be formed and fast initial moves can ensue. The safest way to play these moves is to wait for a pull-back and better yet, a consolidation of the move.. see DBA and RJA for examples of this, and then take them on the move higher above the consolidation area..



Shawn

[Riskslayer]

Hi-



Shawn

[Riskslayer]

Hi-



Shawn