(Re)Introducing the Western Areas Index

Western Areas Index

The Western Areas Index was popularized in the early 1980s by avid South African resource investors in an effort to more accurately time entries and exits in volatile mining shares.

The Western Areas Index is one of a handful of tools that we consider indispensable: No investment in a resource stock is undertaken without consulting the indicator.

Three measures of momentum are illustrated in the Index:

Long-term:

Western Areas Index

Medium-term:

Western Areas Index

Short-term:

Western Areas Index

How to Interpret the Index:

At Fahy Capital Management, we are contrarians who consider taking trades and investing when sentiment is exceedingly bearish or bullish. When Long-term, Medium-term and Short-term momentum are cratering or peaking, we begin looking for indicator divergences.

In the illustrations above (Silver Futures, Weekly) you will notice that Medium and Short-term momentum are currently printing divergences relative to the price of silver: each is printing a succession of higher lows over the course of several weeks. To us, this indicates an emerging opportunity in the silver space on the long side.

Adding On to an Existing Position, or, Timing an Entry in a Preexisting Trend:

If a trend has been established to the upside, we wait for Short-term momentum prints below 10% before we enter long or add on to existing longs. Likewise, if a trend has been established to the downside, we wait for Short-term momentum prints above 90% before we enter short or add on to existing shorts.

Momentum Convergences:

When Medium-term and Short-term momentum converge below 20% or above 80%, it is interpreted as a warning: it’s time to lighten up or take profits — the trend is overextended. A much rarer event is described by a convergence of Long-term, Medium-term and Short-term momentum. That would constitute a three-alarm warning.

Conclusion:

Although we are resource-sector specialists, the Western Areas Index has proven exceedingly flexible and consequently may be utilized with any stock in any sector and in any time-frame, from 5-Minute to Monthly.




Premium Script Price: $1,099.00

vCycle & vTrend: For the Discerning Investor

vCycle & vTrend

Wherein professional activity, volatility and the least squares method are analyzed in order to make sound determinations regarding short, intermediate and long-term trends.

vCycle & vTrend, written with the conscientious investor in mind, are time-frame agnostic and have been rigorously tested in our family office with the following products: Futures, Equities. Trading in the direction of vTrend results in the highest probability setups.

Upon purchase, three studies (vCycle_Histogram.ts, vTrend_Histogram.ts, vCycle_Upper) will be promptly emailed to you in a .zip file.

How to Import Your vCycle & vTrend Source Files Into ThinkOrSwim

After you unzip the downloaded files, go to ThinkOrSwim Charts and click Studies > Edit Studies. In the new window, make sure you’re on the right tab for either Studies or Strategies, then click “Import” below. In the next window, navigate to the file on your hard drive, select it, and click open.




Premium Script Price: $1,099.00

Fractal Efficiency: Toward a Better Quantitative Analysis of Trend

Fractal Efficiency

Wherein determinants, critical points, holomorphics, volatility, and derivatives of such, produce predictive matrices from which intermediate & long-term directionality may be determined with a high level of confidence.

Fractal Efficiency is time-frame agnostic and has been rigorously tested in our family office with the following products: Futures, Equities

Upon purchase, a lower study (vFractal_Efficiency.ts), a companion upper study (vFractal_Efficiency_Upper.ts) and the Fractal Efficiency Strategy (vFractal_Efficiency_Strategy.ts — Sample Results Below) will be promptly emailed to you in a .zip file.

How to Import Your Fractal Efficiency Source Files Into ThinkOrSwim

After you unzip the downloaded files, go to ThinkOrSwim Charts and click Studies > Edit Studies. In the new window, make sure you’re on the right tab for either Studies or Strategies, then click “Import” below. In the next window, navigate to the file on your hard drive, select it, and click open.

That’s it!




Premium Script Price: $1,099.00

Fractal Efficiency Strategy

Fractal Efficiency Strategy Report (Daily Data)

Symbol: URA (Global X Uranium ETF)

Work Time: 12/29/10 – 9/22/17

Total P/L: $187,990.00

Max trade P/L: $48,240.00

Total orders: 139