wkloss
231 posts
msg #106734
- Ignore wkloss |
6/23/2012 1:05:24 PM
TASC magazine, July 2012 startng on page 82 has a very interesting article by Barry Moore explaining a crash predicting indicator. Charts in the article do a lot better job of illustrating this than can be done with words.
The 1st indicator is a shock event warning. It is calculated on a weekly basis and is used after the close on Friday. It has been tested on several indexes including several foreign exchanges. The author chose the S&P 500 for the article. To generate a warning, the S&P 500 must be down 4.5% or more on a weekly basis. It is called a warning because it is not an automatic sell signal. It simply alerts you to be on lookout for the sell signal below. The article says you can go a long time between sell signals so this one puts you on alert.
The 2nd indicator is the bear market signal. Price must cross below both the 50 day SMA and the 100 day SMA and hold there for three weeks. This is your sell signal.
There is also a buy signal if anyone is interested.
The article gives instructions on setting these up in Google Finance and suggests that you review them every week. That's probably good advice for stay at home traders and not good advice for people with hectic day jobs and who like me, travel a lot. Since these signals usually do nothing, I can see myself forgetting to look at them. Setting up these signals here in SF and having them emailed might be the reminder necessary to check them regularly.
Anyone care to code these?
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