Data &
Technology
Research
Reports
Report Solutions
Reports Library
Actionable
Strategies
Free
Resources
Simple Backtest Calculator
Simple Seasonality Calculator
The Kelly Criterion Calculator
Sentiment Geo Map
Public Research Reports
Free Webinar
Pricing
Company
About
Meet Our Team
In the News
Testimonials
Client Success Stories
Contact
Log inLoginSign up
< BACK TO ALL REPORTS

TCTM - Composite Confirmation Model Component Signal

Dean Christians
2021-02-25
A new sub-industry group momentum signal registered this week.

In my Tactical Composite Trend Model (TCTM) update last week, I mentioned that one of the ten components in the Composite Confirmation Model (CCM) had failed to register a buy signal post the pandemic low. The indicator measures the percentage of sub-industry groups with a positive 1-year rolling return. As prices started to roll down from the February 2020 peak this week, the 252-day rate of change calculation ticked up for more groups, and the indicator increased above the threshold level (80%) for a signal on 2/23/21. I designed the CCM to identify the difference between a bear market rally and the start of a new cyclical uptrend. Because the individual indicators within the model utilize big picture concepts, the signals are not as timely as other TCTM components.

EDIT: This was updated after publication to change the signal date from 3/23 to 2/23/21

Let's take a look at a few historical chart examples and the signal performance.

Please note, signal resets occur on a cross below 45%.

CCM - Sub-Industry Group Momentum Chart 

CCM - Sub-Industry Group Momentum Chart 

CCM - Sub-Industry Group Momentum Chart 

I included a chart of the 2002-03 bottom so one can see how a normal bottoming process sets up a better risk/reward profile as prices consolidate in a sideways pattern before breaking out.

CCM Component Historical Signal Table

The table below shows CCM signals started to trigger at the end of May 2020 and continued to register over the next six months.

CCM - Sub-Industry Group Momentum Performance

As the table below shows, the long-term results for the indicator are excellent. However, the signal occurred after a 73.48% gain from the low.
On average, previous signals occurred after a 27% gain from the bear market or correction low. The pandemic crash and v-shaped bottom wreaked havoc on long-duration indicators like this one from a timing perspective.

Conclusion: As we've seen from several other long-duration momentum indicators, the backdrop for the market remains constructive.  


Sorry, you don't have access to this report

Upgrade your subscription plan to get access
Go to Dasboard
DATA &
TECHnologies
IndicatorEdge
‍
BackTestEdge
‍
Other Tools
‍
DataEdge API
RESEARCH
reports
Research Solution
‍
Reports Library
‍
actionable
Strategies
Trading Strategies
‍
Smart Stock Scanner
‍
FREE
RESOUrCES
Simple Backtest
Calculator
Simple Seasonality
Calculator
The Kelly Criterion
Calculator
Sentiment Geo Map
‍
Public Research Reports
‍
Free Webinar
COMPANY
‍
About
‍
Meet our Team
‍
In the News
‍
Testimonials
‍
Client Success Stories
Pricing
Bundle pricing
‍
Announcements
‍
FAQ
© 2024 Sundial Capital Research Inc. All rights reserved.
Setsail Marketing
TermsPrivacyAffiliate Program
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

Testimonial Disclosure: Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.