Tuesday, February 25, 2014

New M3 Ghost setup.....2.25.14

Registered M3 users should have received the new M3 Ghost version today via email. 
Please email me if you haven't received the file.

The market continued the closing weakness pattern that started yesterday.  Earnings season has kicked off and this may be the catalyst that drives the markets into the next trend.  We shall see.

The M3 Ghost provides a fourth input slot on the DATA tab.  It was placed there with the intention of filling it with SHY...the I shares 1-3 year Treasuries ETF...essentially the equivalent of CASH.
The slot does not have to be filled, however the Ghost gives you the option of doing so.  The slot can be deleted or filled as desired by the user as long as its an ETF or NYSE/NAZ stock.
Updating the MACROS with the ghost slot filled will produce modified results in virtually all the RESULTS tab performance metrics and rankings.  I've circled the SHY fills for the example shown here...you just have to pay attention that you're looking at SHY and not SPY.

Here are the results with the ghost turned on:
And the results with the ghost turned off:
Keep in mind that you also need to follow the SHORT TERM ALERT and equity curve P6 STOP but using the ghost can clarify the risk picture in many instances.

What about using the ghost with the AUTO STOP?
Here we are without the ghost and with the AUTO STOP:
And with the ghost and with the AUTO STOP:
Running a daily update of your focus M3 setup both with and without the ghost feature can help clarify the current risk profile by emphasizing the relative strength of cash (SHY) versus the momentum of the beta exposed components of th4 model.