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Information about “STOCK MARKET TIMER”
When should you buy and when should you sell your stocks? What numbers
should you watch? The STOCK MARKET TIMER uses figures from your daily
newspaper to time your actions to ongoing trends, not whims.
This market analyzer is based upon M. G. Zahorchak's book entitled "The
Art of Low Risk Investing." Mr. Zahorchak's main idea was to help the
individual investor to protect himself from himself. That is, to give
the investor a method of investing other than investing on hot tips or a
stock some "guru" is touting that week.
To that end, he presented guidelines to investing based on several
moving averages. If followed, the investor could expect to at least
approach future investments with some discipline in his trading
activities.
The data STOCK MARKET TIMER uses is quite simple and readily
available. Market direction is determined from three sources: the
weekly closing DJIA; the weekly number of Advancing and Declining
stocks on the NY Stock Exchange; and the S&P500 weekly closing
figures. Individual stocks are selected by the system user and are thus
unique to the individual.
FILE1800.TXT
Disk No: 1800
Disk Title: Stock Market Timer
PC-SIG Version: S1
Program Title: Stock Market Timer
Author Version: 2.1
Author Registration: $29.00
Special Requirements: None.
This market analyzer is based upon ideas in a book by M. G. Zahorchak
entitled "The Art of Low Risk Investing". The main idea of Mr.
Zahorchak's was to help the individual investor to protect himself, from
himself. That is, to give the investor a method of investing besides
investing on hot tips or a stock that some Guru is touting that week.
To that end, he presented guidelines to investing based on several
moving averages. If followed, the investor could expect to at least
approach future investments with some discipline in his trading
activities and to limit buying when the risk to his capital was low.
The data the STOCK MARKET TIMER uses is quite simple and readily
available. Market direction is determined from three sources; (1) The
weekly closing DJIA, (2) The weekly number of Advancing and Declining
stocks on the NY Stock Exchange, and (3) The S&P500 weekly closing
figures. Individual stocks are selected by the system user and are thus
unique to the individual.
PC-SIG
1030D East Duane Avenue
Sunnyvale Ca. 94086
(408) 730-9291
(c) Copyright 1989 PC-SIG, Inc.
GO.TXT
╔═════════════════════════════════════════════════════════════════════════╗
║ <<<< Disk #1800 STOCK MARKET TIMER >>>> ║
╠═════════════════════════════════════════════════════════════════════════╣
║ To start program, type: SMTMENU ║
║ ║
║ To print documentation, type: COPY MARKET.DOC ║
╚═════════════════════════════════════════════════════════════════════════╝
MARKET.DOC
STOCK MARKET TIMER
Version 2.1, Mar. 12 1989
Stock Market Timer
COPYR. 1986-1989 Ron West
All rights reserved.
Ron West
2207 Lochwood Court
Richmond, VA 23233
Requirements:
An IBM PC/XT/AT or compatible with PC-DOS/MS-DOS versions
2.0 or higher should be used. While floppies are acceptable, a
hard disk is recommended.
Copying and Distribution:
This version of the Stock Market Timer is intended to be
distributed for evaluation purposes and therefore you are
welcome and encouraged to distributed it provided that you make
no charge beyond media and handling costs ($7 Max).
License Agreement:
If you think that the Stock Market Timer can assist you in
your stock trading activities and would like to install the
latest version plus auxiliary print programs, send your payment
of $29.00 (plus $2.00 shipping) to:
Ron West
2207 Lochwood Court
Richmond, VA 23233
User support will enable the development of additional
features and future versions of the Stock Market Timer. Also, by
sending in your payment you will be a registered user, enabling
you to receive both technical support, announcements of possible
later releases, the latest version of the Stock Market Timer and
several auxiliary programs. Please feel free to contribute your
ideas regarding desired additional features to the product.
DISCLAIMER OF WARRANTY
THIS SOFTWARE AND MANUAL ARE SOLD "AS IS" AND WITHOUT WARRANTIES
AS TO PERFORMANCE OF MERCHANTABILITY OR ANY OTHER WARRANTIES
WHETHER EXPRESSED OR IMPLIED. BECAUSE OF THE VARIOUS HARDWARE
AND SOFTWARE ENVIRONMENTS INTO WHICH THIS PROGRAM MAY BE PUT, NO
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE IS OFFERED.
GOOD DATA PROCESSING PROCEDURE DICTATES THAT ANY PROGRAM BE
THOROUGHLY TESTED WITH NON-CRITICAL DATA BEFORE RELYING ON IT.
THE USER MUST ASSUME THE ENTIRE RISK OF USING THE PROGRAMS. ANY
LIABILITY OF THE SELLER WILL BE LIMITED EXCLUSIVELY TO PRODUCT
REPLACEMENT OR REFUND OF PURCHASE PRICE.
Page 2
TABLE OF CONTENTS
Title Page
Requirements 2
License agreement 2
Background 4
Data sources 4
Stock selection 5
Getting started 5
Building your Data Base 6
Weekly stock analysis 7
Data Base correction 8
Data Base backup 9
Stock splits 9
Quick start Data Base 10
Change history 10
Weekly Stock Price form 11
Registration form 12
Comment form 13
Background:
In the late 70's an article appeared in a forgotten APPLE
magazine which discussed a computer program that was developed
based upon ideas in a book by M. G. Zahorchak entitled "The Art
of Low Risk Investing". At the time I was interested in the
Stock Market and was looking for some means of timing the
purchase or selling of stocks. I located a copy of the book and
after examining the program began writing my own market timing
system to implement many of the ideas the author expressed. I
began using early versions of the Stock Market Timer in 1983 and
have continued to do so with all my investments. During this
period I have been very satisfied with the results of the system.
Of course, since late 1982 we have been in a historic Bull market
and I'm sure that played a roll in the performance of my stock
portfolio. Be that aside, I have compared the Stock Market
Timer's Buy/Sell signals with many of the "Wall Street Gurus"
Buy/Sell signals and it is remarkable how similar the timing of
the calls are. I have also bought stocks during a declining
market in spite of the Systems recommendation and subsequently
sold them at a loss. Needless to say, that was a very expensive
lesson which I hope I will not make again.
The main idea of Mr. Zahorchak's was to help the individual
investor to protect himself, from himself. That is, to give the
investor a method of investing besides investing on hot tips or a
stock that some Guru is touting that week. To that end, he
presented guidelines to investing based on several moving
averages that if followed, the investor could expect to at least
approach future investments with some discipline in his trading
activities and to limit buying when the risk to his capital was
low.
Another principle noted by Mr. Zahorchak is that the market
moves in emotional cycles. That people become overly
enthusiastic and bid stocks to unmaintainable levels. Likewise,
they become overly pessimistic and selling will drive prices
down. These swings in emotions cause temporary price
fluctuations in stocks which will eventually be corrected to
more normal prices. These changes can occur even with no change
in a company's outlook.
One final point, Mr. Zahorchak notes that the technique of
moving averages are not designed to anticipate exact market tops
or bottoms but will show market changes as soon as possible and
that pretty much is what has occurred.
Data sources:
The data the Stock Market Timer uses is quite simple and
readily available. Market direction is determined from three
sources; (1) The weekly closing DJIA, (2) The weekly number of
Advancing and Declining stocks on the NY Stock Exchange, and
(3) The S&P500 weekly closing figures. Individual stocks are
selected by the system user and are thus unique to the
individual. Buy/Sell recommendations for these stocks are
Page 4
determined from weekly closing price movements collected from a
local or national newspaper in conjunction with the system
generated Market direction indicators. All of the
recommendations are based on 5, 15, and 40 week moving averages
for indices and prices.
Stock Selection:
Several thoughts are offered on stock selection. Select
volatile stocks, ideally with 100 percent changes in price in a
year. Stocks with these swings can easily be seen using a chart
book readily available in your local library. An alternative is
to select stocks with a high (ie., >100) "Beta" which is a risk
measure. This information is available in publications such as
"ValueLine". Pick only stocks you would want to own. This
system works only with the limited number of stocks you have
included from the thousands available in the market. Don't buy
new issues. Its been pointed out that most new issues collapse
during the first Bear market and frequently never recover.
Select only actively traded stocks. If obtaining prices is
difficult, its tough to track a stock. Select stocks from as
many different industry groups as you can and try to avoid
selecting too many from a single industry. Doing this will
hopefully insure that whichever industry group will lead a coming
Bull market, you will have some stock representation in it.
Finally, select stocks from an industry group that have "good"
fundamentals. This information is also available in publications
such as "ValueLine" and "Standard and Poor's" stock reports.
Reports are grouped by industry and show the stocks most
attractive in the group.
Getting Started:
Obtaining the weekly closing prices for the stocks you will
follow is initially a rather tedious task that will take some
time to compile and enter into the Stock Market Timer. (There is
a Quick Start procedure that uses a prebuilt Data Base composed
of 5 predefined stocks for those who would like a very quick
overview of the Stock Market Timer. See below for the procedure
for setting it up). I suggest preparing a single page form for
each stock that you will follow plus a form for the DJIA of 30
stocks, the S&P 500 stocks, and weekly advance/decline figures.
An example is included in the Appendix that you can modify with
appropriate dates and have the necessary copies reproduced at
your local copy center.
With your forms in hand, again visit your local library and
using Barron's Weekly Magazine, The Wall Street Journal (Mondays
issue for Fridays closing prices), or your local newspaper's
financial section with Fridays closing prices, begin the task of
building a 41 week history of prices. Because of the amount of
time this will require you may want to begin with only a small
number of stocks (maybe 30?) that you will track and add to it as
time permits. The Stock Market Timer allows for the addition of
stocks at any time as well as the correction of all data entered.
Page 5
In any case, enter the Stock's name, Line of business,
Earnings for the last 12 months, and the closing stock prices for
the last 41 weeks onto your forms. All Prices are entered with
only two decimal places and fraction conversion is as follows;
1/8 = .13, 1/4 = .25, 3/8 = .38, 1/2 = .50, 5/8 = .63, 3/4 = .75,
7/8 = .88.
Building your Data Base:
Once you have collected your historical data you are ready
to enter it into a file called MARKET.DAT. From DOS enter
SMTMENU to bring up the main menu. Select the "Edit" function
from the main menu which will bring up the Edit Menu. Select the
"Add" function to begin adding your data to your data base. The
first item entered into your data base must be the Advance-
Decline data (Record #1). This is important because only 16
weeks of data is required for the first entry. The System will
advise you that this is Record #1 and you should note the record
number in the proper place on your form. The system then prompts
you for the Stock's Name. Respond with "Advance/Decline" and hit
"Enter". Next it will ask for Line of Business. Respond with
"10000 + (Prev Weeks Advance - Declines)" or whatever you want.
Just don't enter commas into any field for any record. Next it
will prompt you for Earnings to which you can respond with 0 and
hit "Enter". Finally, it will ask for Purchase Price to which
you can also respond with a 0. It will then prompt you for the
weekly "Prices" to which you will respond with the weekly
Advance/Decline data. To enter the first Advance/Decline data
element a trivial calculation is required. Subtract the
number of Declining stocks from the number of Advancing stocks
for the oldest week (ie., week 16) and add that figure (whether
plus or minus) to 10,000. The 10,000 is a number which should be
large enough to keep the Advance/Decline numbers positive. For
the remaining 15 weekly entries simply subtract the number of
Declining stocks from the number of Advancing stocks for each
week and add the result to the preceding weeks calculation and
enter the result into the Data Base.
After you have entered 16 weeks of Advance/Decline data the
system will exit to the Edit Menu. Again select the "Add"
function and the system will again advise you of the Record
Number for this Stock. Note the Record Number on your form
(Record #2) and the System will prompt you for the Stock's Name.
The procedure is same for this entry as for Record #1 except you
respond to the Name prompt with "DJ 30 Industrials", and you
respond to Line of Business prompt with "Dow Jones 30 Industrial
Index" or whatever strikes your fancy. However, this time and for
all remaining entries, when the system prompts you for your
oldest price its referring to 41 Weeks ago and it requires 41
price entries.
After you have entered 41 weeks of DJ30 data, the system
will again exit to the Edit Menu. Select the "Add" function,
note the Record number (Record #3), and enter S&P500 data for 41
Page 6
weeks. Finally, you are ready to enter your first stock entry.
The procedure is exactly the same as the previous records. Note
the Record number, enter the Stock's Name, enter the Line of
Business, enter the Earnings for the last 12 months, enter the
Purchase Price if you own the stock, otherwise enter 0, and then
begin entering the Closing Prices for the last 41 weeks beginning
with the oldest data. After you enter your stock information the
system will return to the Edit Menu. Repeat this for your
remaining stocks. After entering your last stock, exit back to
the Main Menu as this completes the Data Base building. Place
the forms in a 3 ring binder in Record Number sequence for ease
of use each week. While this may sound very time consuming, its
not. It takes about 1.5 hours per week to gather and enter the
data on about 175 stocks.
Weekly Stock Analysis:
Weekly, obtain the Friday's Closing Price for the stocks you
follow and have entered into your Data Base, plus Advance-
Decline, DJ30 Industrials, and S&P500 data. Enter this data onto
the appropriate form for the week and after collecting the data
for all your stocks you are ready to Analyze the Market for the
week. If you miss a closing price for a stock simply repeat the
closing price for the previous week, note the stock and when the
price becomes available correct the price using the "Edit"
function which is discussed below.
Begin by entering SMTMENU from the DOS prompt which will
bring up the Main Menu and then select the Analysis function.
The program will first ask if you would like to backup Market.Dat
before beginning. It is a good idea to do this if you have
enough space on your disk. It only takes a moment and if you
have a power failure or really mess up your data base you can
easily restore from the backup (The backup is called Market.Bak).
If you have Graphics capability and are displaying in 80
character format, the program will ask if you would like to
display a price graph with each stock. A graph is useful not
only in seeing both the weekly and 5 week averages but you can
spot bad data you have entered and correct it.
After those housekeeping chores are completed you are ready
to begin the weekly stock analysis. The first Record up will be
the Advance/Decline record. The system will display identifying
information and ask you for the number of Advancing stocks for
the week and then the number of Declining stocks. The second
record will then be brought in and the closing value for the DJ30
Index will be requested. This will be repeated for the third
record, the S&P500 Index, and then Overall Market Information
will be displayed. The system waits for you to digest that
information and after you signal the system to proceed, by
hitting any key, it begins asking you for the closing prices
for each of the Stocks in your Data Base and responds with Stock
Advisory Information for each Stock as well as a price graph. If
a stock which you own declines by 10% or more from either the
highest price obtained in the last 40 weeks or declines 10% or
more from the price you paid, a sell recommendation is generated.
Page 7
This should either prevent losing a large part of your stock's
gain in the first case or will allow you to cut your losses in
the latter.
If you should enter an erroneous closing price for a stock,
note the Record number for the stock and go ahead and complete
the data entry for your remaining stocks and then select the Edit
function and "Verify" the stock and reenter the correct price.
The deletion of a stock is done by replacement of the
existing stock. That is, by selecting the Edit function and
"Changing" all fields with entries from the new stock. You will
probably find that you will be doing this from time-to-time as
new ideas present themselves.
As you enter the weekly closing prices for your stocks any
new Buy/Sell signals generated by the program are accompanied by
a "beep" to bring it to your attention.
The reason yearly earnings data is captured, is to present
Price/Earnings ratios for the stocks which you have chosen to
follow, and you may be reluctant to buy a recommended stock when
the P/E Ratio is very high or you may become "nervous" retaining
ownership of a stock which has had a nice run up in price and is
now experiencing a high P/E. But that's your decision. There is
no substitute for your own good judgement and I cannot over
stress the need to study all available financial information you
can get your hands on. You'll find a gold mine of financial
information at your public library and it will not only provide
you with new possibilities and interesting stocks but you can
evaluate other's ideas about the direction of the market and
economy.
One other comment about market averages to aware of, and
that is what is called "whip-sawing". This will happen when a
Stock or Market is moving in a very narrow price range for an
extended period of time. The Market will make a slight move out
of the narrow range and cause a "Buy/Sell" signal and the next
week move back into the narrow range again and shortly thereafter
cause the opposite "Buy/Sell" signal to be issued. Of course, I
try to spot this and remain on the sidelines. Sometimes a good
indicator of this is when the 5, 15, and 40 Weekly Averages are
very close together and the current price jumps enough to cause a
Buy/Sell. So be on guard against the "Whip-Saw".
It is very important that the data be collected weekly and
entered into the Stock Market Timer on a regular weekly basis to
be of any use. Further, it is recommended that Quarterly you
visit your local library and update your Earnings information for
each of the Stocks you have selected. A handy source for
Earnings information is the Standard & Poor's "Stock Guide" which
is issued monthly and is widely available. Programs are provided
upon Registration that will print forms for ease in gathering
Earnings information.
Page 8
Data Base Correction:
From time to time you may want to add another stock to your
Data Base. Simply collect the 41 week history for the stock as
you did when you created the Market Data Base originally and
select the Edit function from the Main Menu and then the Add
function from the Edit Menu. A good source of information is
alternate weeks of "Barrons" which shows the weekly price changes
for most all stocks. This also minimizes your newspaper
handling.
If you make an error in entering the weekly price of a
stock, from the Edit Menu select the Verify function and reenter
the incorrect Closing Price when it is displayed. The system
will ask you for the Record Number for the Stock to be changed,
so it is important that the Record Number was noted as you Added
the Stock to your Data Base. However, if you would rather use
the stock's name, "Change" or "Verify" will prompt you for the
name. Key enough characters to make the name search unique. Be
aware also that the search is "case sensitive". That is, a stock
with the name of "Pepsico" is not the same as "PepsiCo" or
"PEPSICO".
If you want to change more than a few Prices for a stock
select the Change function from the Edit Menu. This function
will allow you to change any data field in a stock record. With
this function the system will ask if you want to change the
Stock's Name, Line of Business, Earnings, or Purchase Price. It
will then ask if you want to change ALL the prices. If you reply
yes, then you will have to reenter the last 41 weeks of Prices
again.
Data Base backup:
If you are using a Hard Disk on your system I hope you are
regularly backing up your files. Its been frequently said that
there are two kinds of Hard Disk users, those that have had a
hard disk failure and those that are going to. Its very, very
true. So do yourself a favor, and back up your files. If you
don't have a tape streaming device, I recommend that you copy
MARKET.DAT to a floppy before doing your weekly Stock Analysis.
This can be done as follows;
COPY C:MARKET.DAT A:MARKET.DAT
Of course, you may have to modify the statement to
accommodate the path name of a sub-directory if you are using
one. You may also want to name the Market data on the floppy as
the date of the update, for example "12-06-88.DAT" as an aid to
jogging your memory in case you need to restore the data.
Stock Splits:
If your stock has a split, respond at the appropriate prompt
with "split". The program will then request that a divisor be
entered. To determine the divisor on a stock split take the
number of new shares divided by the number of old shares and that
will be the divisor.
Page 9
If a split is then divide by
2 for 1 2
3 for 1 3
4 for 1 4
5 for 1 5
3 for 2 1.5
4 for 3 1.33
5 for 4 1.25
5 for 2 2.5
1 for 2 0.5
1 for 3 0.33
1 for 4 0.25
1 for 5 0.20
Quick start Data Base:
If you do not want to spend the time collecting historical
stock data because you simply want to quickly "sample the flavor"
of the Stock Market Timer, then the Quick Start Data Base is for
you.
First copy QUICK.DAT to MARKET.DAT then begin by entering
SMTMENU from the DOS prompt which will bring up the Main Menu and
then select the Analysis function. The first Record up will ask
you for the number of Advancing stocks for the week, Enter 1820.
Then you will be asked for the number of Declining, Enter 215.
(A great week!). The second Record will be brought in and the
closing value for the DJ30 Industrial Index will be requested,
Enter 2194.29. Next, the S&P500 record will be read in and the
weeks closing figure will be requested, Enter 280.67. At this
time the Overall Market information will be displayed and the
system waits for you to hit a key to continue. The first Stock
will be displayed asking you for the weekly closing price, enter
33.50. The Stock's Advisory Information is then displayed and
the second Stock will be displayed requesting the weekly closing
price, enter 29.75. Repeat this for the third Stock, entering
23.38; the fourth Stock, entering 67.75; and finally for the
fifth and last Stock, enter 47.63. And there you have it.
If you have done this and decide to build your own Market
Data Base, then delete MARKET.DAT and follow the earlier
instructions for getting started. And oh yes, don't forget to
register.
Stock Market Timer change history:
Version 1.X Apple II+ and Apple IIe sytems
Version 2.0 IBM PC/XT/AT Original release (Jan 10, 1989)
Version 2.1 Price graphs and Backup options added (Mar12,1989)
Page 10
Weekly Stock Prices
StockName___________________________________________RecNo________
Exchange_____________ Symbol_____________ Beta____________
Line of Business_________________________________________________
=================================================================
1/8 ______________ 6/10 ______________ 11/11 _____________
1/15 ______________ 6/17 ______________ 11/18 _____________
1/22 ______________ 6/24 ______________ 11/25 _____________
1/29 ______________ 7/1 ______________ 12/2 _____________
2/5 ______________ 7/8 ______________ 12/9 _____________
2/12 ______________ 7/15 ______________ 12/16 _____________
2/19 ______________ 7/22 ______________ 12/23 _____________
2/26 ______________ 7/29 ______________ 12/30 _____________
3/4 ______________ 8/5 ______________ 1/6 _____________
3/11 ______________ 8/12 ______________ 1/13 _____________
3/18 ______________ 8/19 ______________ 1/20 _____________
3/25 ______________ 8/26 ______________ 1/27 _____________
4/1 ______________ 9/2 ______________ 2/3 _____________
4/8 ______________ 9/9 ______________ 2/10 _____________
4/15 ______________ 9/16 ______________ 2/17 _____________
4/22 ______________ 9/23 ______________ 2/24 _____________
4/29 ______________ 9/30 ______________ 3/3 _____________
5/6 ______________ 10/7 ______________ 3/10 _____________
5/13 ______________ 10/14 ______________ 3/17 _____________
5/20 ______________ 10/21 ______________ 3/24 _____________
5/27 ______________ 10/28 ______________ 3/31 _____________
6/3 ______________ 11/4 ______________ 4/7 _____________
Page 11
Registration Form
Please register me as a user of the Stock Market
Timer. I understand I will receive the latest
version of SMT as well as other programs of interest.
NAME_________________________________________ DATE_____________
STREET__________________________________________________________
CITY_________________________________ STATE________ ZIP_________
TELEPHONE_______________________STOCK MARKET TIMER VER._________
Registration fee $ 29.00
Postage & Handling 2.00
COD or not US/Canada (8.00) _______
Total Due _______
To: Ron West
2207 Lochwood Court
Richmond, VA 23233
or call 804-740-0918
Page 12
COMMENT FORM
Your comments about the Stock Market Timer Software are welcome.
Please take the time to fill out this form or write/call us with
your comments and/or suggestions for improvements.
NAME________________________________________
ADDRESS_____________________________________
CITY__________________________________ STATE__________ZIP________
Phone Work___________________________ Home_______________________
STOCK MARKET TIMER Version Number________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Mail to: Ron West
2207 Lochwood Ct.
Richmond VA 23233
Page 13
Directory of PC-SIG Library Disk #1800
Volume in drive A is #1800 S1.1
Directory of A:\
BRUN45 EXE 77440 9-28-88 1:43a
SMTANALY EXE 23892 3-21-90 7:53a
SMTCHANG EXE 14736 5-15-89 12:11p
SMTEARNS EXE 7444 5-15-89 12:12p
SMTLOWPE EXE 7530 5-15-89 12:13p
SMTPORTF EXE 7854 5-15-89 12:14p
SMTPRINT EXE 17302 3-21-90 7:51a
SMTMENU EXE 7250 5-15-89 12:15p
READ ME 2238 5-15-89 12:51p
MARKET DOC 30802 3-20-90 2:30p
GO BAT 38 1-01-80 1:37a
GO TXT 540 1-01-80 7:39a
FILE1800 TXT 2369 4-23-90 2:42p
13 file(s) 199435 bytes
154624 bytes free
