Using GO Charts to Make Buy/Hold/Sell Decisions

The GO Charts at Beat The Dow use the universally recognized colors of the traffic signal -- green, red, and yellow -- to symbolize go, stop, or proceed with caution with respect to equities available for investment.

Observing the patterns of change in the colors in a GO Chart make periods of rising and falling prices readily apparent, not just for a single entity but for entire markets as well. In addition, changes from red to green signal appropriate times to buy entities, while changes from green to red (or yellow) signal appropriate times to sell entities.

When an investor is fully invested in funds in the green zone, he can rest easy knowing he need not make a sell decision until price movement takes one of his holdings into a yellow or red zone. If the investor is safely positioned in money market funds while all his investment options remain in the red zone, he can relax in the knowledge that he needn't make a buy decision until one or more of his options move into the green zone.

Each row of the GO Chart provides data for an entity, whether the entity is a mutual fund, an index, a stock, or a portfolio. GO Chart columns consist of the following: the entity's symbol; a series of market dates x days apart; the name of the entity; its net asset value as of the last date listed; the gain or loss experienced by the entity over the last y market days; the entity's year-to-date gain or loss; its Momentum Ranking and its Raw Momentum Score as of the last date listed.  Some GO Charts also list the entity's Momentum Ranking as of the last time the GO Chart was updated, typically five market days earlier.

Each cell beneath a date contains a number between 1 and 99 representing a Trend Score obtained from averaging a stochastic and a relative strength index for the entity and date. The higher the Trend Score, the more pronounced the entity's upward trend and vice-versa.

x, the number of market days between the second through the twenty-first columns of the chart, is set to 1 to produce a Daily GO Chart. x is set to 21 to produce Monthly GO Charts set to 5 to create Weekly GO Charts.

y, the number of market days' gain or loss shown in the column between the latest closing price and the year-to-date gain or loss, is set to emphasize the gains and losses from a prior milestone date, such as the beginning of the current month.

Trend Scores, in conjunction with the entity's price change from five days ago, determine the color of a cell within a market date column. Cells containing Trend Scores below 50 are colored red, cells with Trend Scores above 64 are colored green. Cells with Trend Scores between 49 and 65 are colored green or yellow depending upon whether the entity's price is higher or lower than its price as of five market days previously.