Chris,
For intermediate to long-term indications I use a 233, 21, 34 stoch. on the indexes. A move above 80 is seen when a strong rally is starting and a crossover downward from above 90 suggests to lighten up on long positions and start picking up short positions. As the indicator accelerates downward, increase short positions. Right now on the DJIA it's gradually decelerating. Along with this, the 144, 13, 8 stoch. is "tuned" to the 233, 21, 34. Bullish performance in that one should lead to a more stabilized 233, 21, 34. Right now the 144, 13, 8 is attempting an upward crossover out of oversold. If it "sticks", the 233, 21, 34 will follow suit. "Tuned" to the 144, 13, 8 is the 89, 3, 5. Right now it's set to form a knee which could get the ball rolling on that 144, 13, 8 crossover. It seems the next few days could be crucial for market direction over the next 3 months.
The 13 dRSI is also helpful. To monitor recovery from (or further deterioration of) a correction, go back to the lowest point in the 13 dRSI on the previous correction. That would be 10/27/97. From there, draw trend lines across the indicator's value on these dates. (You'll see exactly what's going on and how to do it next time from this).
12/24/97
1/9/98
4/28/98
6/3/98
6/15/98
6/19/98 (although not along the progression, it may be a good one)
8/4/98
Going back to previous corrections will help you get used to interpreting this method. In particular, the low on 4/4/94 across the lows on 11/23/94 and 8/25/95 proved to be very useful lines all of'96, '97 and '98.
Hmmm, I wonder what else I have in my toolbox that I can post here,
Doug R |
