Volume & money flow · daily rule · Semiconductors
Money Flow Index on Applied Materials
AMAT with the play, last two years
Shading shows the play's call from the close that triggered it.
Money Flow Index (14)
Dashed lines at 20, 80.
Growth of $10,000 since 2005
Log scale. After trading costs, with T-bill interest while out.
The record
The play against buying and holding AMAT over exactly the same dates, after costs.
| Play, since 2005 | Hold, since 2005 | Play, 5 yrs | Hold, 5 yrs | |
|---|---|---|---|---|
| Annual return | +1.9% | +18.2% | +11.3% | +30.6% |
| Total return | +52% | +3,724% | +70% | +277% |
| Worst drawdown | −63.4% | −63.8% | −32.8% | −55.1% |
| Volatility | 19.1% | 38.8% | 18.6% | 47.3% |
| Sharpe ratio | 0.10 | 0.58 | 0.46 | 0.72 |
| Time invested | 26% | 100% | ||
| Switches per year | 1.3 | 0 |
Every call, graded
Right on 10 of 28 closed calls (36%). In calls averaged +2.6%; out calls saw AMAT move +41.6% on average.
| Called | Call | Price | Until | AMAT moved | Result |
|---|---|---|---|---|---|
| Sep 2, 2026 | IN | $438.46 | now | +5.9% | open |
| Nov 16, 2023 | OUT | $151.22 | Sep 2, 2026 | +189.9% | ✕ wrong |
| Sep 27, 2023 | IN | $131.93 | Nov 16, 2023 | +14.6% | ✓ right |
| Jan 25, 2023 | OUT | $110.53 | Sep 27, 2023 | +19.4% | ✕ wrong |
| Jun 21, 2022 | IN | $91.85 | Jan 25, 2023 | +20.3% | ✓ right |
| Sep 17, 2021 | OUT | $135.09 | Jun 21, 2022 | −32.0% | ✓ right |
| Aug 23, 2021 | IN | $125.93 | Sep 17, 2021 | +7.3% | ✓ right |
| Jul 31, 2019 | OUT | $46.12 | Aug 23, 2021 | +173.1% | ✕ wrong |
| Dec 26, 2018 | IN | $28.33 | Jul 31, 2019 | +62.8% | ✓ right |
| Dec 4, 2018 | OUT | $32.76 | Dec 26, 2018 | −13.5% | ✓ right |
| Sep 7, 2018 | IN | $36.64 | Dec 4, 2018 | −10.6% | ✕ wrong |
| Jun 10, 2016 | OUT | $21.56 | Sep 7, 2018 | +69.9% | ✕ wrong |
An in call is right when the price rose before the next call; an out call is right when it fell. The latest 12 of 29 calls shown.
How the play works
- In when the 14-day MFI crosses up through 20.
- Out when it crosses down through 80.
The creators also stress divergences, which this rule ignores.
The case against
Valeriy Zakamulin tested moving-average timing on up to 155 years of U.S. stock data and found no statistically significant edge in the second half of that record. The rules earned their keep in a few severe bear markets and lagged buy and hold for long stretches in between.