My index trades are not A Random Walk Down Wall Street — though, to some, they may seem to be based on “gut.”
To understand my moves I turn back to my mentor The Chief — who was arguably the best tape trader I have ever met.
Let’s begin with Jerry’s SS or slow stochastic. This has a longer timeframe, which takes time to develop. But, when the SS got to the bottom of the page, it is an excellent buy signal.
Jerry also invented and I use his SS RJ (and the CSJ which is a 15-minute version of it). The SS has a weekly timeline. It utilizes daily data but the highs and lows play out over a longer-term timeframe.
So, when the SS is at the bottom of the page it is as strong a signal to buy as when it is a signal to short at the top of the page. (The Chief would say that that his indicator is far better at the bottom of the page than at the top!)
That’s all I am going to give you or The Chief would sent out a hit on me.
Doug Kass is a world-renowned hedge fund manager with decades of experience and success navigating through some of the most turbulent periods in market history. He is known for his time-tested analytical skills and ability to look past the current noise and herd mentality.
On TheStreet Pro, Kass provides frequent market commentary and investing ideas for active investors throughout each trading day in Doug’s Daily Diary. He also serves as president of Seabreeze Partners Management Inc. Previously, he served as a senior manager at Omega Advisors, a $6 billion investment partnership. He co-authored a book with Ralph Nader and the Center for the Study of Responsive Law called “Citibank: The Ralph Nader Report” and can be found as a guest host on CNBC's "Squawk Box."
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