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Indextrader,
<<
The only problem is of course deciding which will be the
laggards and which will be the stronger ones from tommorrow
on.
>>
I question your requirement...........
"which will be the stronger ones from tommorrow on"
I think the strong will become the weak and vice versa and
back again as time passes. Without spending anymore than
the time to read your post I would recommend using some
form of relative strength concept. I.e.,
{********** Sample code***********}
Inputs:ShortLen(10),LongLen(50);
Vars:RS(0),C2;
C2 = Close of data2;
RS = C/C2;
If Average(RS,ShortLen) > Average(RS,LongLen)
and .........then buy;
{********** End of Code***********}
BTW, data2 can be the S&P index or any index of your choice
but I have discovered that I get better results when I use
the Value Line Arithmetic Index (1600 stocks). It is not
capital weighted as most indexes and seems to work better
in comparison tests. I learned this trick from Nelson
Freeburg.
I have found that relative strength can become one of the
best ways to improve stock trading performance when using
other good filters with it. The question is, "What is the
best formula for RS?" THe above formula works;however, I
would be glad to hear other opinions of good RS formulas
and concepts.
Russ
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