Regression Oscillator rev.

Patterned after Goedde article TASC March 1997

This system can be developed with existing tools in WOW and MS. An important distinguishing feature that WOW has is the system testing capabilities in Smart Scan. The following Excel table shows a system test for Regression Oscillator rev. for Buy and Sell signals generated over the past 60 days. This system test indicated that 93% of IBD Weekend Review securities triggering a trade signal in this time frame show a net profit when stock is bought or sold at the open price the day following the trade signal. Starting capital for this test was $10,000. I have tested this system for 2 weeks on the IBD WR stocks. Both tested at >93%. I will be interested in continuing to monitor the progress of this System.

SMART SCAN REPORT
Executed March 2, 1997; 09:44 AM - Scanned last 60 periods.
Trading Systems: Enabled, Custom Alerts: Enabled, Percent Change: Disabled
% Change settings: Close = 0.000%, High = 0.000%, Low = 0.000%, Volume = 0.000%
Scan executed on 0 charts and 202 securities.
System Net $
01/22/97 - COMVERSE TECHNOL]Sell at 45.5014764.61
01/28/97 - EMPLOYEE SOLUTIO]Sell at 22.6314282.34
01/27/97 - COMPUWARE CORP]Sell at 65.5014255.28
02/14/97 - SIMPSON MFG INC]Sell at 29.0011816.37
02/04/97 - FIRST USA INC]Sell at 50.5011552.05
02/10/97 - TARO PHARMACEUTI]Sell at 11.1310253.35
12/30/96 - PIONEER FINL SVC]Sell at 25.006808.92
12/11/96 - HON INDS INC]Sell at 34.636714.65
01/29/97 - MICREL INC]Buy at 34.756507.47
01/22/97 - BRIGHTPOINT INC]Buy at 27.756270.33
01/31/97 - STUDIO PLUS HOTE]Sell at 21.756120.34
01/20/97 - ITT EDUCATIONAL]Sell at 25.386063.31
12/10/96 - GATEWAY 2000 INC]Sell at 58.884809.22
01/29/97 - MAXSERV INC]Buy at 7.133983.64
01/02/97 - STANLEY FURNITUR]Sell at 19.003863.44
01/17/97 - UNITED WASTE SYS]Sell at 36.253785.64
01/10/97 - SPECIALTY PAPERB]Sell at 23.003414.29
12/30/96 - WESTCAST INDS IN]Buy at 22.003294.10
02/24/97 - CULP INC]Sell at 18.633238.13
12/17/96 - AZTEC MFG CO]Sell at 7.883016.88
12/23/96 - TEL-SAVE HLDGS I]Sell at 12.252286.08
01/07/97 - TEVA PHARMACEUTI]Sell at 53.252196.49
12/11/96 - COMPUTER LEARNIN]Sell at 27.502033.75
01/30/97 - HEICO CORP NEW]Buy at 22.881984.44
02/12/97 - HALIFAX CORP]Sell at 12.751810.50
01/29/97 - COMP DE TELECOMM]Buy at 25.131606.92
02/12/97 - MACDERMID INC]Sell at 38.001379.34
02/25/97 - THERAGENICS CORP]Buy at 26.001332.69
02/11/97 - AVERT INC]Buy at 7.19569.29
01/02/97 - CLEAR CHANNEL CO]Sell at 34.75-1328.03
01/16/97 - HOLLYWOOD ENTMT]Sell at 21.63-2346.07

Regression Oscillator and the Slope/Close Indicator

In MetaStock 6.0 it's easy to create the Regression Oscillator and the Slope/Close Indicator from Richard Goedde's article, "Market timing with the regression oscillator", which appears in the March97 issue of Technical Analysis Stocks and Commodities magazine.

First choose Indicator Builder from the Tools menu and enter the following formulas:

Regression Oscillator

100 * (CLOSE/ LinearReg(CLOSE,63)-1)

Slope/Close

10000* LinRegSlope(CLOSE,63)/CLOSE

Next drag each of these formulas from the Indicator QuickList and drop them on the heading of a

chart. To create horizontal lines, click the right mouse button while the mouse pointer is positioned

over the Regression Oscillator to display the shortcut menu. Choose Regression Oscillator

Properties. On the Horizontal lines page add horizontal lines at 14, 0, and -14. You can use The Explorer to perform the screen mentioned in the article.

First choose The Explorer from the Tools menu, next create a new Exploration with the following information:

Column A

Name: Reg Osc

Formula: Fml("Regression Oscillator")

Column B

Name: Slp/Cls

Formula: Fml("Slope/Close")

Filter

Formula: ColB > 50 and ColA >-15 and ColA < -5

Choose OK and then Explore to run the Exploration.

For MetaStock for Windows 5.x users the instructions are the same except enter the following custom indicator in place the ones mentioned earlier.

Regression Oscillator

100 * (CLOSE/ ((63 * Sum(Cum(1) * C,63) - Sum(Cum(1),63) * Sum(C,63)) /

(63 *

Sum(Pwr(Cum(1),2),63) - Pwr(Sum(Cum(1),63),2)) * Cum(1) + (Mov(C,63,S) -

Mov(Cum(1),63,S) * (63 * Sum(Cum(1) * C,63) - Sum(Cum(1),63) *

Sum(C,63)) / (63 *

Sum(Pwr(Cum(1),2),63) - Pwr(Sum(Cum(1),63),2))))-1)

Slope/Close

10000* ((63 * Sum(Cum(1) * C,63) - Sum(Cum(1),63) * Sum(C,63)) / (63 *Sum(Pwr(Cum(1),2),63) - Pwr(Sum(Cum(1),63),2)))/CLOSE