Moving Average Analysis of MBI

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From the Weekend Report 11/5/2010: The MACD Cycle is in phase one here, with MBI 54.00 % above the 200 bar SMA, increasing the distance over the week.

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Different ways of averaging are tested on MBI stock prices for their ability to predict trend movements. An infinite selection of moving average techniques is available, including but not limited to moving weighted and exponentional averages and MACD indicators of various flavors.

Unfortunately, some of the most popular indicators of this type can prove to be the worst forcasting indicators. The effectiveness of these methods as applied to MBI stock price trend evaluation is tested on the next page.

Red is the 200 bar SMA and Green is the 20 bar average. The Simple Moving Averages above are un-weighted. While unsophisticated, they frequently yield better results than some of the more highly tuned methods examined in following sections. It is always possible to fine tune an exponential or other weighted average so that it seems to outperform a simple average in a given situation. However, over-tuning can increase false and misleading indicators. A good un-ambiguous signal will be noticable through a variety of averaging methods, including some of the most simple.

	Companies In the News
	In the news, Monday, November 15, 2010: A favorable condition has developed with Sprint Nextel Corporation, ticker symbol S. Also, there are breaking events concerning Abbott Laboratories (ABT) and Cree, Inc. (CREE)

MACD analysis would appear perfect for overtuning, since it may use any of an infinite number of averaging methods and coefficients. In addition to crossover signals from various moving averages, analysts frequently add a trigger line based on some average of the first two averages. Here we depict the results of 12 and 26 session Exponential Moving Averages. The exponential coefficient used here is .18. There is nothing magic about these parameters, but these are frequently seen.

Float the cursor for a longer term chart.

Moving Average Convergence Divergence, or MACD, produces buy or sell signal that are color tinted here.

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Moving Avg. 20/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 20 instances
Future30SesAvgClose	-1.23 % minus 1.10 % = -2.33 %	-19.76 %
Future5SesAvgClose	1.43 % minus 0.22 % = 1.21 %	61.61 %
Future2SesAvgClose	1.20 % minus 0.11 % = 1.09 %	138.37 %
Sell Signals - 20 instances
Future30SesAvgClose	1.75 % minus 1.10 % = 0.65 %	5.50 %
Future5SesAvgClose	-0.53 % minus 0.22 % = -0.75 %	-37.93 %
Future2SesAvgClose	-0.38 % minus 0.11 % = -0.49 %	-61.96 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 162 instances
Future30SesAvgClose	0.83 % minus 1.10 % = -0.27 %	-2.29 %
Future5SesAvgClose	0.16 % minus 0.22 % = -0.06 %	-3.12 %
Future2SesAvgClose	0.20 % minus 0.11 % = 0.09 %	11.71 %
Sell Signals - 162 instances
Future30SesAvgClose	1.53 % minus 1.10 % = 0.43 %	3.62 %
Future5SesAvgClose	-0.01 % minus 0.22 % = -0.23 %	-11.83 %
Future2SesAvgClose	0.07 % minus 0.11 % = -0.04 %	-5.26 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 30 instances
Future30SesAvgClose	-1.62 % minus 1.10 % = -2.73 %	-23.09 %
Future5SesAvgClose	-1.04 % minus 0.22 % = -1.26 %	-64.25 %
Future2SesAvgClose	-1.01 % minus 0.11 % = -1.12 %	-142.64 %
Sell Signals - 30 instances
Future30SesAvgClose	-0.63 % minus 1.10 % = -1.73 %	-14.68 %
Future5SesAvgClose	-0.82 % minus 0.22 % = -1.05 %	-53.12 %
Future2SesAvgClose	-0.50 % minus 0.11 % = -0.61 %	-77.47 %
	.
MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 532 instances
Future30SesAvgClose	1.26 % minus 1.10 % = 0.16 %	1.35 %
Future5SesAvgClose	0.11 % minus 0.22 % = -0.11 %	-5.64 %
Future2SesAvgClose	-0.14 % minus 0.11 % = -0.25 %	-31.39 %
Sell Signals - 533 instances
Future30SesAvgClose	1.44 % minus 1.10 % = 0.34 %	2.86 %
Future5SesAvgClose	0.20 % minus 0.22 % = -0.02 %	-1.25 %
Future2SesAvgClose	0.12 % minus 0.11 % = 0.01 %	1.39 %
	.
MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 750 instances
Future30SesAvgClose	1.22 % minus 1.10 % = 0.12 %	1.01 %
Future5SesAvgClose	0.30 % minus 0.22 % = 0.08 %	3.85 %
Future2SesAvgClose	0.24 % minus 0.11 % = 0.13 %	16.57 %
Sell Signals - 749 instances
Future30SesAvgClose	1.10 % minus 1.10 % = 0.00 %	-0.02 %
Future5SesAvgClose	0.22 % minus 0.22 % = 0.00 %	-0.01 %
Future2SesAvgClose	0.00 % minus 0.11 % = -0.11 %	-14.35 %
	.
Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 283 instances
Future30SesAvgClose	1.35 % minus 1.10 % = 0.24 %	2.05 %
Future5SesAvgClose	0.31 % minus 0.22 % = 0.09 %	4.47 %
Future2SesAvgClose	0.18 % minus 0.11 % = 0.07 %	8.62 %
Sell Signals - 284 instances
Future30SesAvgClose	0.62 % minus 1.10 % = -0.48 %	-4.07 %
Future5SesAvgClose	0.14 % minus 0.22 % = -0.08 %	-3.84 %
Future2SesAvgClose	0.03 % minus 0.11 % = -0.08 %	-10.41 %
	.
Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 183 instances
Future30SesAvgClose	2.50 % minus 1.10 % = 1.39 %	11.79 %
Future5SesAvgClose	0.13 % minus 0.22 % = -0.09 %	-4.36 %
Future2SesAvgClose	0.09 % minus 0.11 % = -0.02 %	-2.39 %
Sell Signals - 183 instances
Future30SesAvgClose	1.17 % minus 1.10 % = 0.06 %	0.51 %
Future5SesAvgClose	-0.02 % minus 0.22 % = -0.24 %	-12.12 %
Future2SesAvgClose	-0.06 % minus 0.11 % = -0.17 %	-22.04 %
	.
Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 22 instances
Future30SesAvgClose	1.55 % minus 1.10 % = 0.45 %	3.80 %
Future5SesAvgClose	-0.72 % minus 0.22 % = -0.94 %	-47.86 %
Future2SesAvgClose	-1.11 % minus 0.11 % = -1.22 %	-154.91 %
Sell Signals - 24 instances
Future30SesAvgClose	-2.07 % minus 1.10 % = -3.18 %	-26.90 %
Future5SesAvgClose	-2.01 % minus 0.22 % = -2.23 %	-113.14 %
Future2SesAvgClose	-1.15 % minus 0.11 % = -1.26 %	-159.83 %
	.
Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 171 instances
Future30SesAvgClose	1.50 % minus 1.10 % = 0.39 %	3.30 %
Future5SesAvgClose	0.57 % minus 0.22 % = 0.35 %	17.75 %
Future2SesAvgClose	0.30 % minus 0.11 % = 0.18 %	23.38 %
Sell Signals - 169 instances
Future30SesAvgClose	0.62 % minus 1.10 % = -0.48 %	-4.08 %
Future5SesAvgClose	0.13 % minus 0.22 % = -0.09 %	-4.44 %
Future2SesAvgClose	0.22 % minus 0.11 % = 0.11 %	13.49 %
	.

The best buy signal for 30 future sessions was 1.39 % from the Calibrated M by Q Full Cycle Moving Avg.,and the best sell signal for was -3.18 % from the Projected Crossing of SMA 20/200..

For 5 future sessions the best buy signal was 1.21 % from the Moving Avg. 20/200 Divergence,and the best sell signal was -2.23 % from the Projected Crossing of SMA 20/200..

The best buy signal for 2 future sessions was 1.09 % from the Moving Avg. 20/200 Divergence,and the best sell signal was -1.26 % from the Projected Crossing of SMA 20/200..

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