Our “Big Picture” investment system tells you when to BUY and when to SELL. AlphaDow is a “binary wave” system composed of five market timing indicators. We use it as a “regime filter” — or a measure of whether the “tide” of the market is going up or going down. When five systems give a BUY signal (the cyan histogram will touch the upper green BUY line) it is time to BUY stocks. When three or more systems give a SELL signal (the purple histogram touches the lower red line) go to the safety of cash or money market funds.
Much thought and research has gone into each of the systems and their parameters. Each has been rigorously back-tested and thoroughly examined for effectiveness. This simple summary can be used to keep you out of most of the danger associated with the stock market. Click on image to enlarge.
What to Buy:
The simplest way to participate in the market is with an ETF (Exchange Traded Fund) that tracks the overall market. Research Associates (RAFI) has plenty of data that indicates their methodology generates positive “Alpha” (or excess return). We then overlay our AlphaDow System to give BUY and SELL signals on the index, thus marrying the benefits of RAFI and our New Dow Theory to form Alpha Dow.
Currently we are on a BUY signal and as such we are LONG the S&P500. Powershares investors should be LONG the Powershares FTSE RAFI US Index ticker PRF.
For Canadian investors outside of an RRSP who wish to switch tax free between stocks and money market, we recommend Powershares FTSE RAFI Canadian Index.
Candian investors in tax deferred accounts or those who wish to have the ability to enter stop loss orders can use iShares FTSE RAFI ETF ticker CRQ on the Toronto Stock Exchange (TSX).
Click here to watch a short video description of our system: http://screenr.com/TpMN
For stop loss information, or a more comprehensive list of what to buy, please send an email to email@example.com