Frequently Asked Questions
About Chaikin Analytics
Chaikin Analytics provides award-winning technology and newsletters to help investors find incredible opportunities, apply a directional edge to their process, and develop the potential to substantially grow wealth.
The company’s founder, Marc Chaikin, is a recognized stock market expert. He has spent over forty years on Wall Street developing computerized stock selection models for professional money managers as well as individual investors.
About Model Testing
Good question. This is because the Power Gauge describes likely relative performance. It scores all the stocks based on how likely they are to outperform other stocks in the rating universe. The top 7th of the list are called “Very Bullish”. The bottom 7th are called “Very Bearish”. There’s some proprietary ‘bucketing’ in between. Whether the “underperformers” go up or down is a function of the market.
Another good question. This is because of the cap-weighting of the benchmark indices. A small number of very large cap stocks (like Apple, Walmart, and Exxon Mobil) largely determine the fate of the cap-weighted indices. If they did very well or poorly in a particular period, the index benchmark will be pushed to one side.
The technical overlay ‘clips’ Bullish stocks which are breaking down, and Bearish stocks which are breaking out to the upside. The effect on results is generally: Some good Bullish stocks which are going to outperform would not be in the Bullish buckets. We would lose a little performance on these. However, some of these would be in for very steep drops. Vice versa for Bearish stocks. This would affect “drawdown” if we were tracking a model portfolio. The easiest way to describe this is: the overlay lowers the risk of the model. It cuts a little upside and a lot of potential downside.
No. These results show a standard “buy all” evaluation method. Many different strategies can be used to turn the Rating into a model portfolio. These include market timing considerations, money management and exit rules, and other stock selection criteria (such as short-term technicals). We are comfortable the model is effective across a wide variety of portfolio creation strategies.
It could. Remember, there are a lot of stocks to pick from. It does mean that on average, the stock is more likely to outperform the rest of the stocks in the Russell 3000 index 1, 3, and 6 months from now. But the RATING is not a MARKET indicator. It’s not saying whether the market is likely to go up or down. And the Rating itself is not a TIMING indicator. It doesn’t tell you what might happen to the stock over the short-term, like the next few days or weeks, for example. A stock may be very short-term overbought, and at risk for pulling back over the next few days or weeks, but still likely to outperform over 1-6 months. Chaikin Analytics provides other Indicators and Signals to determine short-term TIMING risk. We also suggest you confirm with the stock’s technicals and Industry Group strength.
Yes. All testing is done with end-of-week Power Gauge Ratings. Over the course of many years, daily changes tend to wash out. However our products do update and display Power Gauge Ratings on a daily basis, and these can trigger Signals. However on a historical chart, you will see the end-of-week value for all weeks, including the current one.
For Desktop: If you have a supported browser (see “platforms” question above) Chaikin Analytics will run inside your browser, there is no need to install anything. Just visit app.chaikinanalytics.com and sign-in.
Once your subscription is activated:
Desktop: go to app.chaikinanalytics.com and enter your user name (email address) and password, then, click “Sign-In”
If you forget your username and password, press “Reset Password” and follow instructions or contact Customer Service at [email protected]
Yes. You can sign out and sign in as another subscriber at any time, as long as that user has a Chaikin Analytics subscription. No information is shared between sessions.
Using Chaikin Analytics
The Chaikin Power Gauge™ rating is the centerpiece of the Chaikin Analytics system. It combines 20 factors into a simple, reliable rating of a stock’s potential performance relative to the market over the next six months, and is validated by 10 years of independent backtesting. The Power Gauge is also supported by the successful performance of the NASDAQ Chaikin enhanced alpha indexes, which exceeded their benchmarks by over 45% in the first year.
Stock screening expert Marc Gerstein writes:
“The Chaikin Power Gauge rating does an excellent job identifying stocks that have the potential for strong intermediate-term price performance because it was designed to do just that. Believe it or not, that’s unusual!”
Chaikin Analytics provides 6 pairs of Buy/Sell Signals to identify stocks with important patterns of trading activity. While Chaikin Power Gauge ratings are designed to help you decide which stocks to buy, Signals help you decide when. We recommend using Signals in conjunction with Power Gauge, Technical, and Industry Ratings to arrive at a fully informed Buy/Sell decision. Signals are calculated daily for all U.S. equities.
Certain stocks with a Power Gauge rating of “Neutral” may also display an indication of “Positive Potential” and “Negative Potential”. Here’s how it happens:
- The Power Gauge calculation combines 20 weighted factors to arrive at a ‘raw’ rating for a stock, ranging from Very Bearish to Very Bullish.
- However, if the stock is in a very strong positive price/volume trend, a “raw” Bearish or Very Bearish rating will be modified to Neutral, with a “Positive Potential” indicator.
- Conversely, if a stock is in a very negative price/volume trend, a “raw” Bullish or Very Bullish rating will be modified to “Neutral” with a “Negative Potential” indicator.
In these cases, assuming the underlying Power Gauge factors remain consistent, once trending activity for the stock decelerates, the underlying Bearish or Bullish rating should take effect.
The Power Gauge Rating has been tested in real-world conditions and proven successful at identifying stocks likely to out- or underperform the market over the next six months.
The Chaikin Power Gauge rating includes the acclaimed Chaikin Money Flow―another indicator you can use in conjunction with the Power Gauge rating to help you buy or sell stocks profitably.
The Chaikin Money Flow (CMF) indicator is on each stock chart on Chaikin Analytics for Desktop and iPad, above the Chaikin Power Gauge ribbon.
On our Chaikin Power Gauge Reports and in Chaikin Analytics, the CMF indicator is displayed over a one-year and five-year time frame.
The Chaikin Money Flow (CMF) measures the flow of money in and out of a stock on a 20-day basis. It’s one of the most accurate displays of supply and demand for a stock, because it reflects the volume of trading relative to price action. A stock’s Money Flow should fluctuate from green to red and back again as its stock price rises and falls.
A stronger stock will generally have more green than red. Consider buying a stock when you see the indicator turn from red to green, or if it stays green during price declines. Consider selling a stock when you see the reverse happening.
The CMF indicator is displayed on most technical indicator packages worldwide. It is a perfect companion to the Chaikin Power Gauge stock rating.
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