DLPAL Signal Confirmed Yesterday

DLPAL Signal Confirmed Yesterday


After the close of Monday, May 15, 2017,  DLPAL signaled deterioration of positive bias in Dow 30 and higher probability of a correction. The confirmation of the signal yesterday adds to empirical evidence about the short-term predictive power of the ensemble features engineered by the program.

DLPAL uses uses primitive attributes of price action, and specifically the open, high, low and close, to extract features types in an unsupervised learning mode. These features can be then used for identifying trading strategies and for engineering other more advanced features. Examples are the P-Dow ensemble features and specifically the P-Dow ratio, also called P-ratio. This ratio is the fraction of stocks with positive directional bias in a group, in this case the Dow 30. We know from empirical studies that if this ratio falls towards 0.5 or below, then the probability of stock market correction is high. Below is the output of DLPAL PRO as of close of Monday, May 15, 2017, that shows the values of  P-ratio and other engineered features.

TS is the profit-target and stop-loss file,  P-long and P-short are the long and short probabilities for a position in the corresponding ticker, P-delta is the difference  (P-long – P-short), a measure of the directional bias and S is the significance of the result. 

For more details about the features and statistics click here. The P-ratio after the close of last Monday was 0.50. This signals high probability of a correction in the following three days. In this case, the correction occurred after two days, yesterday. Note that all indicators generate false positives and the p-indicator is no exception to the rule.

Disclaimer:  No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.

Copyright notice: Any unauthorized copy, reproduction, distribution, publication, display, modification, or transmission of any part of this report is strictly prohibited without prior written permission. 


via Price Action Lab Blog | Quantifying Market Price Action http://ift.tt/1hnoc7s

May 18, 2017 at 09:42AM


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