Several weeks ago someone posted on another blog how the Andrew's Pitchfork chart was indicating a buying opportunity. Interested in learning more I googled "pitchfork stocks" and as usual Google supplied several million hits. The first hit was Investopedia - a great website for investment information. At another site it presents the original Andrew's course material. All of these sites speak of the remarkable better than 80% cross-over rate to a "median line" to help predict price changes - 80% that is pretty impressive.
The Median Line strategy details are not presented here. For more information see the above websites or google "andrew pitchfork median line."
Using a Java program to calculate the "pivot points" for any stock I went about to study the success rate of +80%. Taking all the stocks in the S&P 500 over any period the program calculated all of the pivot points. Then taking successive pivot point groups (P0, P1, and P2 ) the program found the median point between P1 and P2; the median line (from P0 through the median point) and the program iterates to the end to determined if a future closing price reaches the median line as the line extends through time for each group.
The results of the program show that the 80%+ hit rate is almost attainable. The success rate of the S&P 500 over a 3 year period is about 77% - pretty darn close to the reported 80%.
Price meets median line: 8948 - ~76.6%
Price did not reach: 2730 - ~23.4%
For example here are the calculated IBM's pivot points and these are followed by the hit results:
Pivot Points:
1 Pivot Point Rising starts at 97.86 position 14 2009-05-13
2 Pivot Point Falling starts at 105.95 position 33 2009-06-10
3 Pivot Point Rising starts at 97.03 position 50 2009-07-06
4 Pivot Point Falling starts at 116.66 position 83 2009-08-20
5 Pivot Point Rising starts at 112.95 position 91 2009-09-01
6 Pivot Point Falling starts at 118.53 position 100 2009-09-15
7 Pivot Point Rising starts at 116.11 position 108 2009-09-25
8 Pivot Point Falling starts at 124.88 position 120 2009-10-13
9 Pivot Point Rising starts at 116.87 position 128 2009-10-23
10 Pivot Point Falling starts at 125.72 position 144 2009-11-16
11 Pivot Point Rising starts at 122.85 position 151 2009-11-25
12 Pivot Point Falling starts at 131.1 position 185 2010-01-15
13 Pivot Point Rising starts at 119.62 position 193 2010-01-28
14 Pivot Point Falling starts at 125.47 position 206 2010-02-17
15 Pivot Point Rising starts at 123.26 position 219 2010-03-08
16 Pivot Point Falling starts at 127.01 position 229 2010-03-22
17 Pivot Point Rising starts at 125.28 position 240 2010-04-07
18 Pivot Point Falling starts at 130.92 position 264 2010-05-11
19 Pivot Point Rising starts at 121.6 position 274 2010-05-25
20 Pivot Point Falling starts at 129.25 position 289 2010-06-16
21 Pivot Point Rising starts at 120.25 position 300 2010-07-01
22 Pivot Point Falling starts at 130.9 position 325 2010-08-06
23 Pivot Point Rising starts at 121.75 position 338 2010-08-25
24 Pivot Point Falling starts at 134.35 position 361 2010-09-28
25 Pivot Point Rising starts at 133.02 position 362 2010-09-29
26 Pivot Point Falling starts at 145.97 position 391 2010-11-09
1 Pivot Point Rising starts at 97.86 position 14 2009-05-13
Cross line on 2009-07-16 closing price 107.15 median line point value 106.97
2 Pivot Point Falling starts at 105.95 position 33 2009-06-10
no hit starting at this pivot point
3 Pivot Point Rising starts at 97.03 position 50 2009-07-06
Cross line on 2009-10-09 closing price 122.53 median line point value 121.05
4 Pivot Point Falling starts at 116.66 position 83 2009-08-20
Cross line on 2009-10-01 closing price 114.72 median line point value 114.82
5 Pivot Point Rising starts at 112.95 position 91 2009-09-01
Cross line on 2009-10-12 closing price 123.61 median line point value 122.7
6 Pivot Point Falling starts at 118.53 position 100 2009-09-15
Cross line on 2009-10-16 closing price 118.35 median line point value 122.46
7 Pivot Point Rising starts at 116.11 position 108 2009-09-25
Cross line on 2009-12-14 closing price 126.99 median line point value 126.83
8 Pivot Point Falling starts at 124.88 position 120 2009-10-13
no hit starting at this pivot point
9 Pivot Point Rising starts at 116.87 position 128 2009-10-23
Cross line on 2010-10-12 closing price 138.68 median line point value 138.54
10 Pivot Point Falling starts at 125.72 position 144 2009-11-16
Cross line on 2010-01-20 closing price 127.3 median line point value 128.28
11 Pivot Point Rising starts at 122.85 position 151 2009-11-25
Cross line on 2010-03-23 closing price 127.01 median line point value 126.48
12 Pivot Point Falling starts at 131.1 position 185 2010-01-15
no hit starting at this pivot point
13 Pivot Point Rising starts at 119.62 position 193 2010-01-28
Cross line on 2010-04-14 closing price 128.85 median line point value 128.38
14 Pivot Point Falling starts at 125.47 position 206 2010-02-17
Cross line on 2010-05-06 closing price 122.28 median line point value 124.84
15 Pivot Point Rising starts at 123.26 position 219 2010-03-08
Cross line on 2010-09-24 closing price 132.99 median line point value 131.64
16 Pivot Point Falling starts at 127.01 position 229 2010-03-22
Cross line on 2010-05-17 closing price 128.71 median line point value 129.14
17 Pivot Point Rising starts at 125.28 position 240 2010-04-07
Cross line on 2010-06-15 closing price 128.07 median line point value 126.94
18 Pivot Point Falling starts at 130.92 position 264 2010-05-11
no hit starting at this pivot point
19 Pivot Point Rising starts at 121.6 position 274 2010-05-25
Cross line on 2010-08-04 closing price 129.53 median line point value 129.44
20 Pivot Point Falling starts at 129.25 position 289 2010-06-16
no hit starting at this pivot point
21 Pivot Point Rising starts at 120.25 position 300 2010-07-01
Cross line on 2010-09-24 closing price 132.99 median line point value 132.01
22 Pivot Point Falling starts at 130.9 position 325 2010-08-06
no hit starting at this pivot point
23 Pivot Point Rising starts at 121.75 position 338 2010-08-25
Cross line on 2011-01-14 closing price 149.41 median line point value 148.67
24 Pivot Point Falling starts at 134.35 position 361 2010-09-28
Cross line on 2010-11-10 closing price 145.97 median line point value 148.62
Price meets median line: 18 - 75%
Price did not reach: 6 - 25%
The Median Line strategy details are not presented here. For more information see the above websites or google "andrew pitchfork median line."
Using a Java program to calculate the "pivot points" for any stock I went about to study the success rate of +80%. Taking all the stocks in the S&P 500 over any period the program calculated all of the pivot points. Then taking successive pivot point groups (P0, P1, and P2 ) the program found the median point between P1 and P2; the median line (from P0 through the median point) and the program iterates to the end to determined if a future closing price reaches the median line as the line extends through time for each group.
The results of the program show that the 80%+ hit rate is almost attainable. The success rate of the S&P 500 over a 3 year period is about 77% - pretty darn close to the reported 80%.
Price meets median line: 8948 - ~76.6%
Price did not reach: 2730 - ~23.4%
For example here are the calculated IBM's pivot points and these are followed by the hit results:
Pivot Points:
1 Pivot Point Rising starts at 97.86 position 14 2009-05-13
2 Pivot Point Falling starts at 105.95 position 33 2009-06-10
3 Pivot Point Rising starts at 97.03 position 50 2009-07-06
4 Pivot Point Falling starts at 116.66 position 83 2009-08-20
5 Pivot Point Rising starts at 112.95 position 91 2009-09-01
6 Pivot Point Falling starts at 118.53 position 100 2009-09-15
7 Pivot Point Rising starts at 116.11 position 108 2009-09-25
8 Pivot Point Falling starts at 124.88 position 120 2009-10-13
9 Pivot Point Rising starts at 116.87 position 128 2009-10-23
10 Pivot Point Falling starts at 125.72 position 144 2009-11-16
11 Pivot Point Rising starts at 122.85 position 151 2009-11-25
12 Pivot Point Falling starts at 131.1 position 185 2010-01-15
13 Pivot Point Rising starts at 119.62 position 193 2010-01-28
14 Pivot Point Falling starts at 125.47 position 206 2010-02-17
15 Pivot Point Rising starts at 123.26 position 219 2010-03-08
16 Pivot Point Falling starts at 127.01 position 229 2010-03-22
17 Pivot Point Rising starts at 125.28 position 240 2010-04-07
18 Pivot Point Falling starts at 130.92 position 264 2010-05-11
19 Pivot Point Rising starts at 121.6 position 274 2010-05-25
20 Pivot Point Falling starts at 129.25 position 289 2010-06-16
21 Pivot Point Rising starts at 120.25 position 300 2010-07-01
22 Pivot Point Falling starts at 130.9 position 325 2010-08-06
23 Pivot Point Rising starts at 121.75 position 338 2010-08-25
24 Pivot Point Falling starts at 134.35 position 361 2010-09-28
25 Pivot Point Rising starts at 133.02 position 362 2010-09-29
26 Pivot Point Falling starts at 145.97 position 391 2010-11-09
1 Pivot Point Rising starts at 97.86 position 14 2009-05-13
Cross line on 2009-07-16 closing price 107.15 median line point value 106.97
2 Pivot Point Falling starts at 105.95 position 33 2009-06-10
no hit starting at this pivot point
3 Pivot Point Rising starts at 97.03 position 50 2009-07-06
Cross line on 2009-10-09 closing price 122.53 median line point value 121.05
4 Pivot Point Falling starts at 116.66 position 83 2009-08-20
Cross line on 2009-10-01 closing price 114.72 median line point value 114.82
5 Pivot Point Rising starts at 112.95 position 91 2009-09-01
Cross line on 2009-10-12 closing price 123.61 median line point value 122.7
6 Pivot Point Falling starts at 118.53 position 100 2009-09-15
Cross line on 2009-10-16 closing price 118.35 median line point value 122.46
7 Pivot Point Rising starts at 116.11 position 108 2009-09-25
Cross line on 2009-12-14 closing price 126.99 median line point value 126.83
8 Pivot Point Falling starts at 124.88 position 120 2009-10-13
no hit starting at this pivot point
9 Pivot Point Rising starts at 116.87 position 128 2009-10-23
Cross line on 2010-10-12 closing price 138.68 median line point value 138.54
10 Pivot Point Falling starts at 125.72 position 144 2009-11-16
Cross line on 2010-01-20 closing price 127.3 median line point value 128.28
11 Pivot Point Rising starts at 122.85 position 151 2009-11-25
Cross line on 2010-03-23 closing price 127.01 median line point value 126.48
12 Pivot Point Falling starts at 131.1 position 185 2010-01-15
no hit starting at this pivot point
13 Pivot Point Rising starts at 119.62 position 193 2010-01-28
Cross line on 2010-04-14 closing price 128.85 median line point value 128.38
14 Pivot Point Falling starts at 125.47 position 206 2010-02-17
Cross line on 2010-05-06 closing price 122.28 median line point value 124.84
15 Pivot Point Rising starts at 123.26 position 219 2010-03-08
Cross line on 2010-09-24 closing price 132.99 median line point value 131.64
16 Pivot Point Falling starts at 127.01 position 229 2010-03-22
Cross line on 2010-05-17 closing price 128.71 median line point value 129.14
17 Pivot Point Rising starts at 125.28 position 240 2010-04-07
Cross line on 2010-06-15 closing price 128.07 median line point value 126.94
18 Pivot Point Falling starts at 130.92 position 264 2010-05-11
no hit starting at this pivot point
19 Pivot Point Rising starts at 121.6 position 274 2010-05-25
Cross line on 2010-08-04 closing price 129.53 median line point value 129.44
20 Pivot Point Falling starts at 129.25 position 289 2010-06-16
no hit starting at this pivot point
21 Pivot Point Rising starts at 120.25 position 300 2010-07-01
Cross line on 2010-09-24 closing price 132.99 median line point value 132.01
22 Pivot Point Falling starts at 130.9 position 325 2010-08-06
no hit starting at this pivot point
23 Pivot Point Rising starts at 121.75 position 338 2010-08-25
Cross line on 2011-01-14 closing price 149.41 median line point value 148.67
24 Pivot Point Falling starts at 134.35 position 361 2010-09-28
Cross line on 2010-11-10 closing price 145.97 median line point value 148.62
Price meets median line: 18 - 75%
Price did not reach: 6 - 25%
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