Methodology & Research Philosophy

The proprietary MarketScalpel time series database calculates a wealth of raw sector data, delivered in an accessible, streamlined manner.

While this represents valuable sector information from the perspective of conventional technical analysis in its own right (e.g. volume, breadth, new 52-week highs/lows, etc.), our research philosophy is to move beyond this and marry the best strands of tradition in this area with high standards of quantitative analysis.

This is achieved through the formulation and development of statistical, quantitative and other data analysis techniques applied to the building blocks and basic tenets of technical analysis in genuinely innovative ways.

By applying a rigorous quantitative framework to traditional technical analysis, it is straightforward to rank sector attractiveness according to technical criteria.

Even though no stock market analysis or forecasting technique is foolproof, our approach serves to focus attention for further analysis (fundamental and/or technical) on the areas offering the best structural opportunities, thus maximizing returns on the always scarce resource of time.

Tools & Techniques

The MarketScalpel team has been developing the portfolio of research tools and techniques with this philosophy in mind since 2002, and with significant client input since early 2005.

Our development efforts in this area are ongoing, with currently available examples including:

• Statistical Techniques:

    Money Flow, Volume Confirmation Signals, Beta and Correlation at the sector, industry and stock level

• Quantitative Techniques:

    Aggregation of stock level data to produce sector and industry statistics and sector rankings

• Digital Signal Processing:

    Spectral Analysis algorithm & post processing filters for cycle identification

The Market Navigator online research platform additionally incorporates data and analysis that is widely available and understood, although we believe the overall platform makes great strides in usability.  For more information on the method of calculation please consult the relevant help pages.