Registered User
Joined: 5/2/2007
Posts: 59
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I tried following what he says in the note (10/03/07) until the section where starts talking of the 6 combinations and comparing them to a clock.
Anyone out there Got an easier interpretation of the whole note? I get it in parts but i think the universes one would create from those scans would make alot of sense in terms of o"versold", "under sold", "overbought"......
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Registered User
Joined: 1/28/2005
Posts: 6,049
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1btrader
This is basically a method to categorize price movement using moving averages. The idea
is it is mechanical and not open to your interpretation.
Think of it this way:
1)Most bullish
2)Mild bullish
3)Weak bullish
4)Weak bearish
5)Mild bearish
6)Most bearish
As stocks get strong they head up towards #1.
As stocks get weak they head down towards #6.
A flat stock may only bounce between #3
and #4.
The most bullish case (#1) is price above
all averages and averages in length order.
(from shortest to longest average 20 above 50
and 50 above 100 and 100 above 200
and so on) (a fan pattern)
The most bearish case is the inverse of that.
The other categories are combinations of those
averages in various orders.
We can also create counts of these conditions
to determine overall market health.
This can be seen here in one of my posts:
http://www.worden.com/training/default.aspx?g=posts&t=21524
Thanks
diceman
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