Eyeworld

December 2016 • Ophthalmology Business 19 For reference, a column of X's means the issue is moving up, which is good. A column of O's means it's moving down, and that's not so good. You also need to know the buy signal or sell signal. A buy signal is where a column of X's exceeds a previous column of X's. A sell signal is where a column of O's exceeds a previous column of O's. It's not necessarily as important to know the patterns as it is to be able to identify the column and signal. This chart has an uncanny abil- ity to foreshadow big losses in the markets. In July 2008, this indicator reversed into a lower column of O's from a higher top, with two sell sig- nals. In August 2011, a reversal from a higher top occurred when the U.S. was going through a debt crisis. Then in August 2015, another column change was followed by two sell Mr. Balser is the managing partner and chief investment officer of Balser Wealth Management, Avon, Ohio. He can be contacted at roger@ balserwealth.com. signals. We currently see this indica- tor moving positive, and that's good. This is what makes the "bullish percent for all mutual funds" a pretty good long-term indicator. The second long-term indicator I monitor is the "percent of mutual funds that are in a positive trend" (Figure 2). What do I mean by a positive trend? Any chart that is trading over and above its support line is in a positive trend. It can go up and it can go down, but as long as it stays above support it signals a positive trend. This chart doesn't speak often, but when it does you'd better be listening. It's important to remember that when you're looking at long-term charts, you need to be aware of your field position and whether you're on offense or defense. These charts help you do just that. When they're at washed-out levels and begin to reverse up, then you have the wind at your back and the odds of making money are pretty good. Likewise, when they reverse down from lofty levels, you want to be careful with your investments. It's interesting to note that this chart produced a sell signal three times in 2008. One in January, an- other in July, then a third in Septem- ber of that same year. So this indica- tor gave us a pretty good overview of what was happening in 2008. It also reversed to O's in August 2011 (as our other indicator did when the U.S. was struggling with its debt non- sense). Currently we're positive, but on a sell signal. Our final long-term indicator is the "measure of cash versus equi- ties" (Figure 3). For cash we use the 13-week treasury bill rate compared to the S&P 500. Like the two charts above, it's important to determine whether you're on offense or defense and your field position. When this chart reversed, it occurred (again) at major turns in the markets. In July 2008, it turned, and in March 2009, it turned again. In November 2011, it showed a second buy signal, then in March 2012, a third buy signal. These long-term charts clearly help me to paint a picture of whether we are on offense and in a wealth-ac- cumulation mode, or on defense and in a wealth-preservation mode. OB Figure 3: Measure of cash versus equities on a 3.25% scale Source (all): Roger Balser

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