The left axis is profit and loss x days in the future (i.e. Future Change).
The bottom axis is FMR.
The lines are the number of days in the future.
The study period is from 2/19/08 through 7/11/08.
Conclusion: FMR and Future change are positively correlated. This means that the higher the FMR,
the higher the stock is likely to rise, and
vice versa.
Notes
Financial Market Reader uses a pattern-matching algorithm
on five common technical analysis indicators to create ratings for each of the next five days
for each indicator.
The closest historical matches are used to compute
the likelihood of rise or fall and the possible profit or loss over the next
day and week.
"WLP" or "Won-Loss Percentage": the percentage
historical matches in which the
security was higher x days later.
"P&L" or "Profit-and-Loss": the average
x day return for the historical
matches.
The number after "WLP" or "P&L"
indicates the number of days it is looking ahead.
"Rank" combines all four forecasts. It is an
average of the companies percentage ranking for each forecast, with 99%
being the best.
"Rank" is market neutral in that the average for the
market is always 50%. Because the market has generally been up for the
entire historical period, "WLP" tends to be greater than 50% and "P&L" tends
to be greater than 0.
"FMR" is "Financial Market Rating", a proprietary
indicator that considers additional factors such as the stock's market,
sector and industry context. FMR assigns a rating to each company for
the past 100 days. A company's FMR tells you where it stands relative
to all companies rated in the past 100 days.
Unlike Rank, FMR is not market neutral and doesn't always
equal 50%. The average market FMR will vary widely and can be
considered a bearish or bullish signal for stocks in general.
In general, the correlation between future change and FMR
is double the correlation between future change and any of the preceding
indicators.
For indices, "WLP", "P&L", "Rank",
and "FMR" are averages of the component
companies' forecasts.
Clicking on "WLP", "P&L",
"Rank", or "FMR"
changes the sort order.
"^Up": drills-up to the higher index level. i.e. from "company" to
"industry".
The "(Sectors)", "(Industries)", or "(Companies)" links
allow you to display the components of an index. i.e. a sector's
industries.
"Details": displays a chart of the expected
daily P&L for a
given company or index over the next week.
