Performance Signal  
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Our Methodology

Our proprietary set of indicators measure many aspects of the markets and provide a unique perspective of market dynamics not available to average investors. PSI - Our flagship indicator, is combined with advanced trend tools and our institutional accumulation index to generate our BUY and SELL signals.

5 Factors that Predict Market Direction

Included in PerformanceSignal analysis are the five factors that are proven to effectively predict market direction.

The 5 factors are...
1. Trend (we use eight different proven trend analysis tools)
2. Sentiment Extremes (Proprietary Sentiment Index -PSI)
3. Accumulation and distribution (by institutional investors)
4. Price verses Time extremes
5. Coincidental indicators (like economic sensitive indexes and market moving news such as Federal Reserve Policy changes, surprise jobs outlook, etc...)

It is important to note that investors would find the process of collecting and utilizing this data, difficult to impossible to do on their own because first they must obtain the data then they must interpret it correctly - a daunting task.

The good news is that you don't have to - we will do it for you and with your PerformanceSignal subscription, you get this insight backed by years of research and analysis for less than the price of a financial newspaper.

P -Series of indicators tracks over 50 measurements of market participation to put the highest odds in your favor

PSI indicator - PSI is an indicator that we created based on monumentally important information- the actual trading activity of market beating specialists. There are those that have substantially more money at risk and they use their deep resources to get the best understanding of market dynamics possible many have insider affiliations as well, which give them an unfair sophistication compared to the average investor. Fortunately for us and our clients, all of their trade information is obtainable but few people no where to get it and even fewer know how to interpret the data. PSI painstakingly collects this information along with many other important but often misunderstood pieces of information and paints a picture of what is likely to happen in the stock market. To create this indicator we use over 50 market measurements we collect every day. We can't reveal our best sources of information as it is proprietary but here is a sampling of some of the basic measurements... the NYSE Specialists activity, OEX and other option information, company insiders trading activity, ProFunds and Rydex trading activity, stock bond ratios, US payroll taxes and much much more. The effectiveness of PSI comes from our method of scrubbing the data to remove anomalies and arranging it in such a way as to show trends and extremes in one coherent indicator.

PSI clearly marks points of market rotation that are not obvious to the public. This indicator showed extreme selling by smart money participants in the year 2000 just prior to the nearly three year bear market that followed and has since marked every major market turn.

Trend following combined with PSI - the winning combination.
The trend-timing component of our signals is a robust set of indicators that work in conjunction with our proprietary PSI indicator to get us invested and keep us invested in front of major market moves.

Price trend is an important component of market analysis. Trend reflects the actual decisions of market participants regardless of what seems to face the market. We measure the two most important factors of trend - Price trend direction and price trend velocity.

Trend following confirms PSI data and marks points of entry and exits, it forces us into the market at or near the beginning of significant advances or out of the market before significant declines.

Additionally, our entry and exit points are improved with our Accumulation Index. Our Accumulation index measures the actual accumulation or distribution of institutions (mutual funds, money managers, etc...). These large players have a large influence on market direction and trading along side them improves your returns as well as, helps you see the end of a trend before everyone else.

The weakness of trend systems by themselves is their habit of flip-flopping in choppy market conditions, which severely hurts performance - we avoid these inherent problems with the use of our PSI indicator. The combination of PSI and our multi-tiered trend indicators is the secret to our success as the two together have helped us to identify major market turning points and avoid false signals. Check out our results page for past signals.

Our model is based on our studies of the Nasdaq 100 index which most often leads other indexes. Generally during BUY signals, subscribers enter Nasdaq 100 index funds such as ProFunds Nasdaq 100 index fund or Profunds Ultra Nasdaq 100 index funds (strategies 1-4). Conservative investors can take a diversified approach which will include small cap stock funds, large cap funds, and international diversified funds (strategy 5). The advantage to our strategies is that you can make money when the market moves down with inverse mutual funds and Exchange Traded Funds (ETF's) or simply by shorting ETF's or baskets of stocks during our SELL signals thereby potentially doubling returns. For the very aggressive, our signals can be used with leveraged mutual funds for spectacular gains although with more expected volatility.

There are some basic rules. First there are three signals- BUY, SELL and CASH. In a BUY signal we want to be invested or LONG stock indexes. In a SELL signal, We want to either be in safe cash equivalent investments or short the market to profit from declines. In a CASH signal we want to be on the sidelines protecting hard earned capital and await the next best opportunity. Our signals are generated by 8:00PM EST and explained in full in our email and on our website. The investor simply makes the adjustments as soon as possible, preferably by the open of the stock market the next day and then awaits the next signal. As a matter of safety, we apply a 7% stop loss at the beginning of every signal based on the Nasdaq 100 index just in case geopolitical or major events cause unusual price action.

Our service offers serious investors optional weekly in-depth market commentary that includes short-term market direction, indicator explanations, and interesting charts while we offer a scaled down weekly newsletter via email that covers the basics for those of you that prefer simplicity.

We have purposefully kept our service affordable to allow even novice investors the chance to get superior market insight without the need to sacrifice much-needed investment dollars.

Need more information? send us an email at support@performancesignal.com