Hello LG,
>>James Strauss: What is your take on the new highs / new lows after today's action?<<
I know you asked James about the new highs/new lows, but I thought you might appreciate what I've been doing with the high/low indicator. Vitas recently posted a very good article on the high low index at Message 10028560.
I create the high/low index the same way the author did: new highs/new highs + new lows. You can see that the article references Abe Cohen, who's the father of modern day end of day point and figure charting.
Anyway, I've gone back to 1980 with the high/low index data and placed the results on a bullish percent chart, with each box representing 2% and three boxes required for a reversal. I'm experimenting with different buy and sell requirements. Here, for example, is how it looks from the reversal up on 9/23/98 using a buy at 1) Bear Alerts (reversing up anywhere under 30); 2) crossing 50; and 3) double tops. Sell at 1) Bear Alerts (reversing down below 70); 2) crossing 50; and 3) double bottoms.
80
78 X
76 X X O
74 X O 5 O
72 X O X O
70 X X O X O
68 X O X O X O
66 X O X O X O
64 X C 1 O X O
62 X O X O X O
60 X O X O X O
58 X O X O X O
56 X O X O X O
54 B O X O X O
52 X O X O X O
50 X O X O X O X
48 X O X O X O 6
46 X O O X X O X
44 X 2 X O X O X
42 X O X O X O
40 X O X O X
38 X O X O X
36 X O X O X
34 X O X O X
32 X O X O 4
30 X O X O X
28 X O X O X
26 X O 3 O
24 X X O X
22 X O X O X
20 X O A O
18 X O X
16 X O X
14 X O
12 X
10 X
8 X
6 X
This buy/sell system resulted in the following (shorting not considered):
BUY DOW
SELL DATE DOW % TOTAL TOTAL
B 9/23/98 8154.41
S 12/10/98 8841.58 0.0843
B 12/29/98 9320.98
S 1/14/99 9120.93 -0.0215 0.0628
B 3/4/99 9467.4
S 5/17/99 10853.47 0.1464 0.2092 0.3309
B 6/30/99 10970.8
Lots of notes right now. Sometimes lags, sometimes leads. I'll let you know what proves to be the best results, and any thing worth noting.
Currently, we were in a down column of O's and in the 40's for some time. It reversed up yesterday and today hit 50 for a buy signal. Given its current location and the time it waited (accumulated) in the 40's, historically this often times leads to a good run up. Not like in the teens or 20's, but a mid-term run up.
Take care,
Eric |
