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Strategies & Market Trends : Metastock 6.0 for Window

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To: Michael Olds who wrote (3262)10/2/1999 9:06:00 PM
From: Richard Estes   of 4056
 
In the case here, the stock is in the RUT and happens to move along with it and the DOW. (again, your point, in general terms, is well taken).
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Correlation might be a good means of measuring the relationship. You should expect >.30 or much higher. I would need >.70.
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I have tested the results of the MA a cross. It produces a remarkably safe, although infrequent buy and sell. I also did a system optimization with a variety of different peramaters.
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Were you applying it to the indices or your stock? Did you compare it to other indicators? the eye is often fooled. a simple but effective indicator for trend might be Dahl:

Mov(C,50,S) - Ref(Mov(C,50,S),-15)

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I am not attempting to predict the indicies, only to judge (which I can see with my eye, but want to have built into the equation at least to test) whether or not all three directions are in sync.
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I hope someone gives a solution, I think you want 3 prices in same box. Not sure it can be done. Then you want to determine the Bullish, by measuring stock on a MA cross, to increase reliability you want the indices to be moving up for a certain period. The inclusion of the indices is may be appropriate if 1) there is high correlation between them and the stock. 2) If they correlate to each other. 3) if there are positve results obtained in the system test beating other system tests run on the stock.

I didn't mean to say predict, but measure. Prediction is provided by Gann, Fibonacci, and E-waves. Our other tools measure. Remember the equis site has many formulas that you can paste and copy to build a stable of indicators to compare new systems to, using the compare function.

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