Blog Post On: 9/11/2009

One of MTR members (riskless1) requested a new feature that would forecast a Market Up or Market Down signal in advance. This would allow a one day advanced notice of the market timing signal change. The feature is now live on MTR but is in a Beta release since it needs to be monitored for a week or two.

Overview: The MTR Stock Market Timing Model (MTR-TM) fires Market Up or Market Down signals using proprietary logic based on closing prices of the Value Line Arithmetic Index (VLAI). Forecasting a change in the current signal can only be done one day in advance due to all the logic that is built into the MTR-TM.

Example: As of this post the last market call was Market Up on 7/16/2009. The system at the close of each day will start reducing the MTR-TM by one dollar attempting to fire a Market Down signal. If a market down signal was fired the MTR-TM page would show the next day closing price for the new signal (if no signal was fired, the index is reduced again by $1.00 until a signal is fired). This process continues in a loop until either a signal was fired, or it was determined that other criteria must be met, and therefor the next day will not fire a changed signal.

Members can check the MTR-TM intraday price on the forecasted trading day. If the forecasted price is touched then trade according to the new signal. One caution: MTR-TM is based on closing prices of the VLAI since it is commonly thought that the "pros" influence the closing price of the market. If you trade the signal intra-day but at the close the MTR-TM does not reach that price, no signal will be fired.

The example below shows that no Market Down signal is forecasted for the next day.

If a forecasted Market Down signal was fired the message would have read:

Signal Forecast (BETA): If the MTR-TM closes at or below 994.25 on the next trading day a Market Down signal will be fired.

If you would like to discuss the feature further please follow this link to the forum thread regarding this feature.

Blog Post On: 9/11/2009

To determine whether you should get cash and most stock dividends, you need to look at two important dates. They are the "record date" or "date of record" and the "ex-dividend date" or "ex-date."

When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.

Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.

Here is an example:

Declaration Date	Ex-Dividend Date	Record Date	Payable Date
7/27/2004	8/6/2004	8/10/2004	9/10/2004

On July 27, 2004, Company XYZ declares a dividend payable on September 10, 2004 to its shareholders. XYZ also announces that shareholders of record on the company's books on or before August 10, 2004 are entitled to the dividend. The stock would then go ex-dividend two business days before the record date.

In this example, the record date falls on a Tuesday. Excluding weekends and holidays, the ex-dividend is set two business days before the record date or the opening of the market – in this case on the preceding Friday. This means anyone who bought the stock on Friday or after would not get the dividend. At the same time, those who purchase before the ex-dividend date receive the dividend.

With a significant dividend, the price of a stock may move up by the dollar amount of the dividend as the ex-dividend date approaches and then fall by that amount after the ex-dividend date. A stock that has gone ex-dividend is marked with an "x" in newspapers on that day.

Sometimes a company pays a dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company or in a subsidiary being spun off. The procedures for stock dividends may be different from cash dividends. The ex-dividend date is set the first business day after the stock dividend is paid (and is also after the record date).

If you sell your stock before the ex-dividend date, you also are selling away your right to the stock dividend. Your sale includes an obligation to deliver any shares acquired as a result of the dividend to the buyer of your shares, since the seller will receive an I.O.U. or "due bill" from his or her broker for the additional shares. Thus, it is important to remember that the day you can sell your shares without being obligated to deliver the additional shares is not the first business day after the record date, but usually is the first business day after the stock dividend is paid.

Source - SEC Documentation

Blog Post On: 9/9/2009

The market rallies with a mixed technical picture. First the bull news is that on 9/8 the Advance Decline Line broke to new highs. Typically the market follows and it did today (9/9). The case for a pull back is on divergence of oscillators such as RSI. 

Today the Fed announced that they expect millions of more foreclosures.

The report showed that only "12 percent of U.S. homeowners eligible for loan modifications under the Obama administration's housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming."

This may end up adding some fear into the market. Overall the market is in a place for tightening stops or buying some PUTS / Contra ETFs for downside protection and profit.