Rather than worry about spreads, deflation and other esoteric indicators of the market, I thought I would share with you a carefully thought out indicator (developed on a slow Sept. afternoon), which I call the NY Mets World Series indicator. Ever notice how the NY Mets get into the World Series at critical market points?
If you had sold the market on Friday in the first week of November after the NY Mets played in the World Series, you would have very impressive results. Just playing in the NLCS doesn't count, the Mets have to actually be in the World Series.
Since one would never catch the lows of a move, a simple suggested covering point is to wait for an extreme oversold condition such as using a break of 14 on the 9 period Relative Strength Index (RSI) on the daily charts. The results are in the net gain column in the table below:
Past performance is not indicative of future results. Please folks don’t try this at home. Full disclosure: I am a NY Yankee fan.
1969 – NY Mets vs.
Sold on 11/7/69 Closing Dow 860.48, Market high 871.77, Market Low 627.46 on 5/29/70 – potential 27% gain, 1.3% drawdown
1973 – NY Mets vs.
Sold on 11/2/73 Closing Dow 935.28 , Market high 946.79, Market Low 570.01 on 12/9/74 – potential 39% gain, 1.2% drawdown
1986 – NY Mets vs.
(This one required excellent money management rules )
Sold on 11/7/86 Closing Dow 1886.53, Market high 2749.65 in Aug ’87, Still the Market did make a low @ 1616.21 on 10/20/87 – 14% potential gain, whopping draw down if no money mgmt.
2000 – NY Mets vs. NY Yankees
Sold on 11/5/2000 @ Closing Dow 10,817, 11,436 high, Market Low 7177 on 10/10/02 34% potential gain, 5.7% draw down.
2006?
It sure looks like the Mets are going to make it into the World Series – can’t wait.
Entry Date
|
High
|
Low
|
Cover Daily
RSI(9) <14
|
Potential Gain
|
Draw Down
|
Net Gain
| |||
1969
|
11/7/1969
|
11/10/1969
|
5/26/1970
|
4/24/1970
| |||||
860.48
|
871.77
|
627.46
|
747.29
|
27%
|
(1.3%)
|
13%
| |||
1973
|
11/2/1973
|
11/8/1973
|
12/9/1974
|
8/29/1974
| |||||
935.28
|
946.79
|
570.01
|
656.84
|
39%
|
(1.2%)
|
30%
| |||
1986
|
11/7/1986
|
8/25/1987
|
10/20/1987
|
10/19/1987
| |||||
1886.53
|
2749.65
|
1616.21
|
1738.74
|
14%
|
(45.8%)
|
8%
| |||
2000
|
11/5/2000
|
5/21/2001
|
10/10/2002
|
9/17/2001
| |||||
10817.95
|
11436.42
|
7177.66
|
8920.7
|
34%
|
(5.7%)
|
18%
|
