Rt.. "Would you bet the SOX will reverse its trend and start back higher?" It doesn't matter as I don't trade the SOX index, only individual issues and sometimes the OEX. However, I get your drift that 2% standard deviation and relative strength extremes tend to define the tops and bottoms of averages.. but it very much depends on how steep the larger trend is.
Don't mind me I'm always looking for a trading edge and have gone to extremes sometimes with analysis.. sometimes it works perfectly, other times learning to exit quickly is the only saving grace.
I like to try and isolate individual stocks that are ready to move quickly or continue their move. Holding periods are short, often using options within a day's time, Timing for short term trades needs to be far more exact than long term holding and one's looking for the stray calf in the herd.. not where the herd is headed. A one hour trade off of an intraday -1100 tick reading is different than looking at a five year chart, money supply, and political changes.
Comments on the chart.. the occilations are one month cycles in a series of longer cycles. Sharp charts only goes back to 1995, but here is a longer weekly view of your same occilators. Sox 400 looks like a possibility in the long view of things! Hope not.
stockcharts.com[w,a]waclyymy[d19950101,20010817][pc13!d20,2!i!a1875][vc60][iLc20!La12,26,9!Lw25!Lk14!Lf!Ld20!Lg!Lp14,3,3]
It would appear there's some downside left.. but I'll be looking for those beginning to buck the trend. |
