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Mini class: Eff. test module (Rizwan)
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Timing Solution Admin
I will show how to use Eff. test module in ULE module to estimate the effect of some events.
Let's it will be effect of FED increases rates on Dow.
In ULE -> Fundamentals do this:
and type there the dates when FED increased rates. I put there last 9 hikes and hikes since 2016:
Save them into file clicking "disk" button and download into ULE (file fed_inc_rates.fnd_d):
Calculate and run Eff. test (Stat button).
Next day price drops as expected:
Next period 3 trading days after => 8 trading days after price goes up (14 ups vs 2 downs):
Pay attention: the event here is "FED increases rates" => type there dates when FED increased rates only.
If you need to analyze event "FED changes rates" whatever increase/decrease => type all FED meeting dates when they changed rate.
File is attached, copy it into c:\TimingSolution\Fundamentals\ folder and you can apply it for any price chart.
Exactly the same analysis you can conduct for FNP, but I recommend to separate dates payrolls increase/decrease from previous month, use only these ones (marked by red):
I recommend to take dozen or so dates for more reliable statistic.
Next month it will be forecast based on somebody else forecast, we watch what payroll they forecast and make our forecast based on this information.
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