Scoring System

 

  
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The Scoring System provides daily ratings on UK stocks and is specifically designed for investors and investment managers who go long/short UK equities.

This powerful analytical tool is based on the Elliott wave principle and, despite being very innovative, has already been highly praised amongst investors for its accuracy.

Essential research to manage your portfolio like a hedge fund

Each day the Scoring System provides vital key information on market direction and stocks:

1.       High probability trading signals on UK stocks

2.       Model Portfolio gross exposure

3.       Model Portfolio net exposure

4.       Model Portfolio maximum weighting per stock

5.       Model Portfolio index exposure

E-yield’s clients use the above parameters to construct highly effective share portfolios that perform well in any kind of market, thanks to our innovative and proven approach to investment management.

Composition 50 stocks from FTSE 100
Net Exposure Can vary from 100% net long to 100% net short
Gross Exposure Should not exceed 500% of fund's value

The e-yield scoring system has been developed by Thierry Laduguie, who is an expert in market forecasting techniques. In 2003 he developed the Wave Matrix to time individual stocks and in 2004 he created a sentiment indicator called Bullish Trend Indicator (BTI). Now these analytical tools have been successfully integrated to provide a single stock market timing system, the scoring system.

Thierry founded e-yield in order to promote his innovative research to investors. E-yield is the trading name of Wave Matrix Ltd, which specialises in stock market timing research focusing on large and medium cap stocks in the UK and European markets.  In November 2005 we launched the FTSE Short Term Forecast, which is published daily and discusses market action using Elliott wave analysis and some powerful market timing tools such as the BTI and the Top 20 Differential Indicator.

The BTI is a market sentiment indicator and is already proving to be a reliable and accurate indicator. When the daily change in the BTI is up, sentiment is bullish and when it is down sentiment is bearish. The BTI tells us whether the near term trend in the FTSE is up or down and is therefore used to confirm our Elliott wave forecast.

The Top 20 Differential Indicator detects short term overbought/oversold levels in the market.  This indicator tells us when the market has reached a temporary support or resistance level.  This valuable analytical tool enables investors to exploit timing by taking profits when the markets are in a state of flux.

The Wave Matrix is used to time individual stocks.  Each day the Wave Matrix produces a list of stocks that are oversold or overbought and are therefore ready to start a move.  For example the combination of a rising BTI and an oversold stock is a strong signal to go long.

In November 2005 we completed extensive tests on a new scoring system, which is designed to time the very best entry and exit points into a stock. The scoring system was launched in March 2006 and since that launch date, on 13 March, the results have been extremely successful.

 

66% of stocks achieving a four or five star rating turn into a gain within four weeks (see table)

 
Number of stocks recording a gain: 372 (66%)

Number of stocks recording a loss: 191 (34%)

Average gain: 4.3%

Average loss: -3.9%

 
FTSE Change < -1% [-1% - 0%] [0% - 1%] > 1%
Average stock performance 1.05% 0.70% 0.55% 0.66%

 
The average stock performance after 1,2,3,4 weeks shows the average percentage gain for all stocks, 1,2,3,4 weeks after they became rated * * * * or * * * * * by the scoring system.

 

 The average stock performance in up and down markets shows the average percentage gain for all stocks rated * * * * or * * * * * by the scoring system during periods when the FTSE was down more than 1%, down between 0% and 1%, up between 0% and 1% and up more than 1%. 
Average return per stock selected by the Scoring System after 1,2,3,4 weeks Average return per stock selected by the Scoring System in up and down markets

 

This incredible performance is possible thanks to our scoring system which enables our clients to get in and out of a stock at the most favourable time.  Every day e-yield analyses global stock markets and trends using our proprietary tools such as the BTI, the Top 20 Differential and the Wave Matrix.  We aim to establish a rating for each stock in both the short and medium term. 

Example: Sample of stocks extracted from the system on Friday 10 March

Short term is within three weeks, medium term is three weeks to three months.

Forecast: this tells us that all of the above stocks are expected to move up in both the short and medium term.

Rating: The stocks with the greatest number of stars have the highest probability to return the greatest profit. When a move is imminent, our scoring system catches its turning point at the most opportune stage.  Four and five stars mean that you are catching the move at the very best time and this in turn will boost your returns.

For example, in the above table, the best stocks on that day are BP, Rio Tinto and Standard Chartered because they are rated five stars in both the short and medium term.

Reckitt Benckiser is rated one start up in the short term which means that it is unlikely to rise by much (the advance is mature).

Sample of stocks extracted from the system on Tuesday 14 March

In this table, Vodafone's rally is coming to an end so in the short term there is little chance the stock will rise (one star up).  In the medium term however, four stars down means that it is the right time to go short with a view to taking profits in a few months.

 

How to profit from e-yield's Scoring System

By subscribing to our Model 30 Portfolio you will receive daily ratings on the stocks in the portfolio.  

Model 30 Portfolio

This strategy is directional as the portfolio is exposed to the direction of the FTSE. The best trading opportunities are found in the stocks rated * * * * or * * * * * in the short term. These stocks have a high probability of moving in the direction of their respective short term forecast. In addition, you will receive daily portfolio management information such as: net exposure and level of gearing. This daily information will enable you to construct the optimum share portfolio.

 
Composition 50 stocks from FTSE 100
Net Exposure Can vary from 100% net long to 100% net short
Gross Exposure Should not exceed 500% of fund's value (sum of long and short positions should not be greater than five times fund's value)

See a sample portfolio constructed from information provided by the Model 30 Portfolio

 

Manage Your Own Hedge Fund

When you subscribe to the Model 30 Portfolio, you become a fund manager under e-yield's guidance. Each day, we email you with vital statistics on shares and portfolio structure so that you can invest in the most efficient way. The Model 30 Portfolio enables you to manage your own hedge fund, however, in order to succeed you must interpret the information correctly and adhere to the recommended investment parameters. We have produced a short user guide for the Model 30 Portfolio which is a step by step guide to the entire investment process. It tells you how to interpret our information for best results.

 

 
 
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