Constructing the Monetary Model by Martin Zweig

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pirx

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Constructing the Monetary Model by Martin Zweig (US Markets)

Hello!

I have read Martin Zweig´s book Winning On Wall Street and liked it very much. Now I´m trying to construct the Monetary Model, which he developed, but I got stuck.

The Monetary Model is constructed from Prime Rate Indicator, Fed Indicator and Installment Debt Indicator.

Prime Rate Indicator:
This was not much trouble to find.

Fed Indicator:
This indicator is constructed from discount rate, federal funds rate and reserve requirements.

Discount Rate and Federal Funds Rate:
According to Zweig, both the discount rate and the federal funds rate serve basically the same function so he uses changes in either rate for calculating the Fed Indicator.

One useful site that I found publishes Primary rate, Secondary rate and Federal Funds Rate. The Primary and Secondary rate are not mentioned in his book, so I wonder, which of these should I use?

Reserve Requirements:
I have no idea where to find this data. A quote from his book:
"To calculate the Fed Indicator, you must grade the discount rate and reserve requirements separately. Then their scores are combined. In the following examples, I´ll stick with just the discount rate, but the rules would work exactly the same for reserve requirements. (At this writing, the Fed hasn´t touched reserve requirements since the fall of 1981.)"
Click to expand...
I would very much appreciate if someone could direct me to somewhere, where I can obtain this data.

Installment Debt Indicator:
I understand, for what is it used, and that it is reported once a month, but again, I don´t know where to find the numbers.

Any help is appreciated and when the Monetary Model Worksheet is completed (MS Excel format) I´ll gladly share it with you.

Happy trading and thanks!
 
Last edited:
This has taken a lot of time, but my interpretation of the Market Model is now constructed and available in the attachment.

There are some Slovenian comments in the cells, but you can simply delete them. The requested data also needs to be entered, but this is the least ;)

Enjoy.

UPDATE:
The attachment now contains all of the existing conditions for March 2006.
 

Attachments

  • Zweig Super Model.xls
    54 KB · Views: 2,355
Last edited:
Downloaded your Zweig model. Thanks.
Could you summarize where you get all the data in the model?

Thanks again
 
royallap said:
Downloaded your Zweig model. Thanks.
Could you summarize where you get all the data in the model?

Thanks again
Click to expand...

Hello! I hope you find it usefull.

Since there are too many links to copy/paste, I suggest you to try some googling. If you won´t find all of the sources, let me know, and I´ll help.
 
INstallment debt

How to calculate the Consumer Installment Debt? For example, in his book, the number 3/18/74 is $145.55 Billion. But the http://www.federalreserve.gov/releases/G19/hist/cc_hist_nr.html
it shows on January 1974, the number was $191.222 Billion. Do you know where this $145.55 Billion came from? Thank you for help.

pirx said:
Hello! I hope you find it usefull.

Since there are too many links to copy/paste, I suggest you to try some googling. If you won´t find all of the sources, let me know, and I´ll help.
Click to expand...
 
question about consumer installment debt

How to calculate the Consumer Installment Debt? For example, in his book, the number 3/18/74 is $145.55 Billion. But from the http://www.federalreserve.gov/relea...cc_hist_nr.html
it shows on January 1974, the number was $191.222 Billion. Do you know where this $145.55 Billion came from? Thank you for help.


pirx said:
Hello! I hope you find it usefull.

Since there are too many links to copy/paste, I suggest you to try some googling. If you won´t find all of the sources, let me know, and I´ll help.
Click to expand...
 
viamlvictor said:
How to calculate the Consumer Installment Debt? For example, in his book, the number 3/18/74 is $145.55 Billion. But from the http://www.federalreserve.gov/relea...cc_hist_nr.html
it shows on January 1974, the number was $191.222 Billion. Do you know where this $145.55 Billion came from? Thank you for help.
Click to expand...

The difference is small enough, so don´t worry ;)

But, the truth is, that I don´t know from where the difference comes from. If you start to follow G.19 reports monthly, you will notice, that every single number changes for just a little.

For example - on January 2006, I´ve recorded 2185028 for total Consumer Credit. If you look at it now, it´s at 2177280.

Maybe we should ask the FED why this differences are made.
 
Value line index

Pirx,
Thank you for reply to my question. Thank you for help. Do you know where can I fine the data of the Value Line Composite?
Thanks.


pirx said:
The difference is small enough, so don´t worry ;)

But, the truth is, that I don´t know from where the difference comes from. If you start to follow G.19 reports monthly, you will notice, that every single number changes for just a little.

For example - on January 2006, I´ve recorded 2185028 for total Consumer Credit. If you look at it now, it´s at 2177280.

Maybe we should ask the FED why this differences are made.
Click to expand...
 
viamlvictor said:
Pirx,
Thank you for reply to my question. Thank you for help. Do you know where can I fine the data of the Value Line Composite?
Thanks.
Click to expand...

You can find it right
here.
 
Zweig Super-Model

Hi Pirx

I was about to embark on developing and populating a spread-sheet for Zweig's super-model. As with everything in the markets, nothing is new and I see you have already created a spread-sheet. Have you populated it and kept it up-to-date? Did you ever add the links to the source data?

If you are willing to share your latest efforts I would be very grateful, it will save me quite a bit of time. Otherwise, I will just plough on anyway.

As an aside, have you read Timing the Market by Deborah Weir? She builds an S&P model based around the yield curve ("the best from the world of fundamental analysis"); the number of advancing stocks in the Dow ("the best from the world of technical analysis") when confirmed by VIX or put/call ratio or debt margin/short interest; and the call-up of troops to war ("the best from the world of cultural indicators"). If you liked Zweig, you'll probably like Weir.

Best regards

Steve
 
Hello, Stevoswing.

Sorry that I´m a bit late with my answer.

Yes, I am updating the worksheet weekly and I even made it look better :) But I decided to open a financial blog and this worksheet is going to be one of the features available to members only.

Anyway, I´m willing to send it for free to you. It´s not an editable version, but it should help a LOT if you plan to constuct it by yourself. Let me know where to send it. (I´ll check if I can send it to you via PM - if yes, you should get it shortly)

By the way, I did not read Deborah´s book, but it seems interesing. Thanks for the tip.

Have a nice day!

H.
 
Zweig spreadsheet

Pirx

Thank you very much for replying.

Using someone else's spread-sheet is a bit like using someone else's toothbrush. Not very pleasant but always better than nothing! I have started constructing my spread-sheet but your version will be extremely valueable to have alongside, to double-check method and data.

I'm an infrequent poster to T2W so I'm not sure of the protocol for you to send a file to me - do I simply tell you my email address in one of these messages, or do you have access to it somewhere through the site?

Many thanks
Steve
 
Steve,

you can send me a personal message with your email address. As soon as I´ll have your contact information, I´ll send you the spreadsheet. I would also be very grateful, if you could show me your version, when it´s finished.

Best regards.

Henrik
 
Zweig SuperModel

JZumo said:
I was interested in the spreadsheet for the supermodel and tried the website but it wouldn't pull up. Could you send the spreadsheet to my email address?
Thanks
J
Click to expand...

Can you send me the spreadsheet as well. Your site is a different language.

Thanks!
Carmine
ws6transam at sprintpcs dot com
 
Than you.

This excel file is great. Has there been any progress with getting the concrete places to find the data, or is there a data service company that compiles this info for a fee?

Thanks for any insight,

Jason






pirx said:
This has taken a lot of time, but my interpretation of the Market Model is now constructed and available in the attachment.

There are some Slovenian comments in the cells, but you can simply delete them. The requested data also needs to be entered, but this is the least ;)

Enjoy.

UPDATE:
The attachment now contains all of the existing conditions for March 2006.
Click to expand...
 
Great!

I'd be very interested in this file too! Where can I find it?

Thanks,

Jason

[email protected]

pirx said:
Hello, Stevoswing.

Sorry that I´m a bit late with my answer.

Yes, I am updating the worksheet weekly and I even made it look better :) But I decided to open a financial blog and this worksheet is going to be one of the features available to members only.

Anyway, I´m willing to send it for free to you. It´s not an editable version, but it should help a LOT if you plan to constuct it by yourself. Let me know where to send it. (I´ll check if I can send it to you via PM - if yes, you should get it shortly)

By the way, I did not read Deborah´s book, but it seems interesing. Thanks for the tip.

Have a nice day!

H.
Click to expand...
 
Hi Pirx,
Just read the book winning on wall street ...
This might be an old post ....
You have sent Zweig super model PDF. Could you send me your latest work...
Don't know how excel works and how i should work with it...
With kind regards,
[email protected]
 
Last edited:
pirx said:
This has taken a lot of time, but my interpretation of the Market Model is now constructed and available in the attachment.

There are some Slovenian comments in the cells, but you can simply delete them. The requested data also needs to be entered, but this is the least ;)

Enjoy.

UPDATE:
The attachment now contains all of the existing conditions for March 2006.
Click to expand...


Just wanted to say thanks for sharing the excel file you created on this - really well done!
 
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