|Point Of Sail (POS)|
The POS Indicator is a short term US stock market stochastic momentum oscillator with a supporting long term trend tracking component devised by Maintrimmer Capital Management. The signal is a short term indicator for swing trading on the daily to weekly time frame which takes a contrarian view to trend following, encouraging buying weakness and selling strength. For the POS, the higher the score (4), the more the markets are short term oversold, and the greater probability of higher prices to occur in the future relative to the longer term bullish trend. Conversely, the lower the score (0), the more the market is short term overbought, and the greater the probability of stagnant or lower prices in the future relative to the longer term trend. The strategy will shut down and remain in cash if it determines that there is a longer term market trend weakness. If this occurs, a negative 1 (-1) will appear in the score column as shown below.
The underlying index used to determine the POS signal represents the sum of eight separate indicator scores. Every indicator that is bullish contributes 0.5 unit of value, with a maximum score of four (4) possible from eight total indicators.
The exact signal calculation method is proprietry but include indicators from the following indexes:
- NYSE New Highs-New Lows
- VIX short term and medium term futures
- Institutional Index ($XII)
- Dow Jones Global Titans
- S&P 500 Equal Weight
Maintrimmer Capital recommends using the ETFs SPY or VTI, or the double leveraged ETF, SSO, for trading this system but for the purposes of this tracking we will use the triple leveraged ETF, UPRO, as well as the ETF, SPY. Remember, leveraged ETFs will drop much more when the market declines. SSO will drop twice as much and UPRO will drop three times as much, e.g. a 1% decline in the market will produce approximately a 3% decline in the value of the UPRO ETF.
The ETF will be bought or sold at the closing price on the day following a signal.
The signals are normally published each day after the market close.
Note that the 'Market Heat Index Value' is a market breadth indicator and does not relate to the POS strategy.
The POS strategy went live on August 8th 2015. The results shown prior to this date are back tested results. You can see additonal back tested results back to 2012 and additional information here: