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Understanding Charts,
Trip Lines, Bull/Buy and Bear/Sell Signals
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Understanding the Mid-term Indicant Charts. |
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Bull/Bear Signals-The Red Blocks identify
bull/buy signals. Only two events trigger bull/buy signals. The price must
climb above the Short-term Blue curve and Force Vectors must climb above
Vector Pressure. Bear/sell signals require much more: 1) Price must fall
below Short-term Green. 2) Force Vectors must be in bearish domains. 3) Force
Vectors must be below Vector Pressure. 4) Force must be sloping downward.
5) It cannot be a Red Bull. There a few exceptions to these rules shortly
after bull/buy signals are triggered. |
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Bear/Sell Signals can occur shortly after
buying (or a bull signal) and does not require very many supporting
attributes. Shortly after signaling bull/buy, a
Trip Line is extended to the right and equal to the bull/buy
price.
The most dangerous time in holding a
stock or any investment instrument, including a house, is shortly after
buying it. The Trip Line helps identify a mistake sooner than later. So,
when the price falls below the Trip Line, below Blue, and with Force below
Pressure, a bear/sell signal is triggered. That occurred with bear signals
02, 06, and 08 above.
Notice the small A just to the right of Vector Pressure on the above
chart. You will notice the S&P500 fell below the Short-term Green curve,
while Force Vectors were rising. There was no bear signal because Force
was rising. |
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Notice the small B
on the bottom of the chart and just above this comment. You will notice
bullish spurts. You will notice the price
never crossed above the Short-term blue curve. Therefore, there was no
bull/buy signal. These same rules apply to stocks and funds with a few
exceptions. From time to time, fundamental oversight will override
technical bull/buy signals for specific stocks and funds. Research is
underway to improve performance based on collateral support from the other
indices and certain mutual funds. |
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Notice the letter, C, on the above chart. The
S&P500 Index fell 13% in mid-1975, spanning 9-weeks. Although unsettling,
it was a bearish spurt. A bear signal was not triggered because the rules
for doing so did not qualify a bear signal. The short-term trader will not
find that appealing. The Mid-term cycle is designed to minimize trading,
while maximizing worth. The short-term trader may find more interest in
the Short-term Indicant.
Notice bear signals #10 and #02. Bear signal
#10 occurred because price fell below the trip line before Green crossed
above the bull signal price. But that is not enough. Force must also fall
below Vector Pressure and into bearish domains. Bear signal #10 may appear
to be out of place, but it
is simply the last bear signal on the previous five year chart. The prior
post election year is shown on all subsequent charts and the last signal
in those prior post election years is numbered on the prevailing chart.
About six months after bull signal #03 was
triggered, the short-term Green curve passed above the trip line. At that
time, the trip line is deemed useless as the short-term green curve is now
the underlying attribute that will trigger a bear/sell signal.
Click to
return to all indices. |
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