Prime Rate Indicator – Now Configurable

by Kevin on September 18, 2009

The Prime Rate indicator is now configurable. You can change the threshold ‘high/low’ rate (it’s 8% in the book) and you can choose between either the Value Line Composite Index (Geometric), the S&P 500, or the Dow Jones Industrial Average.

Interestingly, setting the threshold to 14% shows significantly improved performance over 8%. Hmmm… need to look into that!

We only have data going back to the mid-eighties on Value Line (ZUPI approximation) – so we need to work on getting more data – does anyone know where we can get it?

The final thing we need to do is provide summary information like that listed in book – where we show what $10k would grow to, % of signals that were successful, number of months invested and annualized return.

In the meantime, we’re just about to wrap-up testing on the Fed Indicator – so that will be coming very soon.

We hope that you enjoy the interactive site – please let us know if there is anything specific you would like to see next!

Regards,

Team ZweigModel

{ 5 comments… read them below or add one }

Kyle October 8, 2009 at 4:02 PM

Has this model faded away from its original purpose…I think not, it was intended to be an easy indicator that requires a few minutes a month to update.

What websites are you getting information for reserve requirements?

I have tried to find a website dedicated to this indicator for a long time and am glad to have found this one. I personally feel the most important information from the book is to not fight the fed, when doing so I have found it easier to pick up on long term trends.

John Rodrigues October 21, 2009 at 10:38 AM

I think you should be using the Value Line arithmetic index as a proxy for the Zupi. The arithmetic index is unweighted.

Kevin January 25, 2010 at 10:17 PM

Kyle –

Ugh. Sorry for the much-delayed reply. Sometimes life, kids and work get in the way.

I agree that the model was intended to be a quick and easy indicator that requires very little effort to update. My primary concern surrounds the recent contrarian nature of the indicator. Through August of 1999, it was pretty solid – but then has been wrong (and significantly so) ever since. It would be hard to watch that much money evaporate after such a solid performance for so long.

I'm not getting my reserve requirements from *any* website. I can find the discount rate easily on Federal Reserve Board's website – but cannot find the reserve requirement rate. In the book, Zweig only shows the discount rate component and doesn't explain how he melds the two into the Fed Indicator. It's frustrating. Any thoughts would be appreciated.

What do you want to see next? I've pretty much tested the Fed Indicator (Discount Rate only)… and want to get the Super Model out soon.

Thoughts? What do YOU want to see? I've got nights and weekends for this side project and would love your input.

Regards,

Kevin

wkevinw May 14, 2010 at 12:10 PM

The correct proxy for the ZUPI is the Value Line Arithmetic index, not the Geometric.

Kevin June 4, 2010 at 6:37 AM

wkevinw –

Hey guys – I've added the Value Line Aritmetic Index to the list of securities available to match this against.

Are there other indices that you would like to see added and/or would you like to be able to see results compared to individual stocks?

— Kevin

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