Measuredmarkets Inc. (“M2”) uses statistical arrays to perform its calculations. It uses analytical tools rather than inference; its analysis is based on all the data available, not just a sample. In its proprietary process [Patents Pending], M2 uses a measure of market behaviour that is not generally made available in databases of stock market activity: the actual number of trades each day. Using all of the available information improves the quality of information dramatically.
Essentially the Early Warning Service looks at the past behaviour patterns of a stock over time and then issues ALERTS/EARLY WARNING SIGNALS/FLAGS when current trading activity deviates from the normal patterns. This is considered then as being (mathematically) deviant or aberrant behaviour since currently the stock is not following its usual path.
The M2 Early Warning Service analyzes common stocks. Each stock’s behaviour pattern is calculated with reference to 27 different observation points. M2 examines the behaviour of a stock over nine different time series for each of the “measures” (closing price, volume and number of trades). The individual stock is further compared to the overall market movement for the same time periods and measures.
For each item measured -- say, 30-day average number of trades, the item’s value is calculated. Next, the system establishes a normal range for that stock’s 30-day number of trades. If today’s number of trades differs from the 30-day average by more than the calculated normal range, a “flag” or an “alert” is triggered, and the symbol appears on the list of aberrant stocks.
Additionally, where a stock is traded on more than one exchange covered by the Early Warning Service, the measures of Total Volume from each exchange and Numbers of Transactions/Trades from each exchange are added together for a combined measure of total activity. This is done because one cannot properly analyze the “behaviour” of a stock’s Volume and Trades counts if a significant portion of such activity is excluded.
The process developed by M2 allows wide ranges of behaviour for volatile stocks and narrow ranges for stable stocks. Should a stock change over time from stable to volatile, or the reverse, the process automatically adjusts to allow for such changes.
What does that tell us?The purpose of the subscribers-only service is to discover patterns in existing data, with certainty; then to identify where there are significant deviations from the pattern, where a stock is behaving abnormally. Experience has shown that very often such signalled deviations precede substantial changes in the prices of the identified stocks by several days. News stories and press releases referring to major developments often follow.
There is no need to download and analyze market data. There is no need to decide “Which stocks should be examined today?” M2 Early Warning Service notifies subscribers of stocks exhibiting deviant behaviour; it also permits reference to those not showing new signals at the time.
The M2 Early Warning Service does not make investment recommendations; it does alert subscribers to situations which deserve their attention. |
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