I am not sure I understand your question. I assume that you mean:
What indicator or signals are signaling strength at the moment?
If so there are very few right now because I think we are at the extremes in most markets. Either bottoming in the resource sector or topping in the non resource. Strength and weakness will start to show once the new trends are confirmed.
When a trend is in place, I use TA to try to determine where lies the next probable reversal, so I can prepare for either buying or selling (partially or totally)
There are plenty of various indicators that guide me in the markets, both at the micro and macro levels. They come for various sources.
At the macro levels, there are different ratios that use fundamental data. I classify them as technical indicators because they are on a chart and it is a mathematic relation that tells the story. Some will say they are fundamentals indicators. They are as well.
For instance:
- market cap to net income (so-called P/E). A good example is the small caps index Russel 2000 which is near a record high astonishing 240, a level seen only in 2007 and 2000.
- stock market cap as a percentage of GDP also currently at extremes.
- Gold to gold stocks ratios
etc..etc..etc.
Also:
Cycles.. We all say that history repeats itself but with variations. Bear markets follow bull markets.... so cycle analysis is very significant tool. There are long term cycles and shorter term cycles. From a few months to several years.
At the micro levels, technical analysis is what we can observed on a stock charts.
Charts is a courtesy of Stockcharts.com
- cycles are also important there but they do work best for commodities. Gold has shown some very strong cycles in the past 5 years,
- for stocks, the RSI (Relative Strenght Index) is very important to identify lows and highs. Try it on various non-resource or resource stocks...any stocks, at various time frames, daily, weekly, monthly
- fibonacci retracements helps to determine supports level
- lateral supports, gaps, moving averages...etc
There is quite a bit more but this is what I think is the basis. So if you add only this basis to your normal fundamental analysis, I think you have a very good arsenal to improve your returns.
When when use a good money management technique ( like holding a core position for the long term and trading a variable portion of the position), TA really helps. |
