Market Breadth Data******************************
Thursday, January 31, 2008
Wednesday, January 30, 2008
Friday, January 25, 2008
Wednesday, January 23, 2008
Saturday, January 19, 2008
Thursday, January 17, 2008
Today's SPX decline illustrates the value of the indicator used for the mechanical trading system. While many were calling for an end of the pull-back yesterday, the indicator clearly shows that, contrary to popular belief, the market was still pretty much overbought at the close on January 16th.
At this rate, however, the market will be oversold tomorrow when/if it drops below 16.
In the meantime, gold continues to swing right on cue.
At this rate, however, the market will be oversold tomorrow when/if it drops below 16.
In the meantime, gold continues to swing right on cue.
Tuesday, January 15, 2008
Monday, January 14, 2008
Friday, January 11, 2008
To spice things up, I decided to add the "SPX Barometer", a mechanical trading system. The premise behind the strategy is that whether the SPX moves up, down, or sideways, it goes through overbought (high pressure) and oversold (low pressure) cycles. Therefore, the system takes into account only the overbought/oversold nature of the market, with no consideration of price action.
The rules could not be simpler: buy when buying pressure increases (the trigger line crosses above the 5 day moving average), and sell when it decreases (the trigger line crosses below the moving average). Or, for a more conservative approach, buy when the trigger line crosses above the oversold line, and sell when it drops below the overbought line (this is the approach that will be followed here). As a rule of thumb, readings over 36 are overbought, and below 16 -- oversold. Due to FusionChart limitations, only one overbought/oversold level will be marked at a time on the chart
The absolute levels of the signal tracking line are irrelevant and have been removed; the line is included simply to show when the system is right or wrong, and by how much.
Since the data will be updated after the close, it is best to consider this as a reference tool.
It should be noted also, that the SPX Barometer is not related to the Gravity dates, but the two complement each other, and could be used together.
Wednesday, January 09, 2008
Sunday, January 06, 2008
Saturday, January 05, 2008
Friday, January 04, 2008
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All rights reserved by the author. The material contained herein is original content and is the sole property of the author. Any commercial use or reproduction - either in part or whole - is strictly forbidden without the author's prior consent.
Disclaimer: The information provided here is for educational purposes only and does not constitute trading advice nor an invitation to buy or sell securities. The views are the personal views of the author. Before acting on any of the ideas expressed, the reader should seek professional advice to determine the suitability in view of his or her personal circumstances.