Wednesday, August 12, 2009

Eric and Traderfeed's 2123

Always looking for the Holy Grail of buy-sell indicators. Eric was viewing Traderfeed's 2123 4-week hi/lo indicator as an oscillator. Just playing with the chart, I added a 5-day MA to this.

When the "oscillator" crosses the 5-d MA, this has given a fairly reliable buy or sell reversal signal... maybe not on the day, but pretty close. I'm kinda new to the, so I haven't figured out how to superimpose the SPY yet, but these inflection points do come right at intermnediate-term reversals.

1 comment:

  1. If you just use the point where it slopes up or down, you get a buy sell signal that is about 5 days late.

    so using your cross you get a buy/sell indicator 7 days later or so.

    That does get rid of the "Failures" of the indicator.

    and Holy Grail, Most of my point is that as a breadth indicator it's useless to show a Weakening of the trend leading into a top.

    but I did want to credit it with an ability to give a Latent buy/sell signal.