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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (48718)	4/30/2000 4:31:00 PM
From: Michael Watkins	Read Replies (3) \| Respond to of 99985

James, Going back to 1998 and using the fast MACD shows the signal in October... That signal which led to the advance to 5000 was not as strong as the current signal... charts.barchart.com; No disagreement on the facts here, but I guess I should add that in addition to my comments on MACD I frankly don't have a lot of use for indicators, particularily in calling major swing points. Just my opinion and style of course, but the best use I have for indicators is to determine strength of trend. Turning points in my opinion are best uncovered using price (and often volume) alone. On the other hand, there's a ton of people that look at common indicators and if they think a MACD cross over, despite the current environment, is bullish, well, they may well act on it and buy like mad. For me technical analysis is less about predicting future price movement than it is about interpreting what is happening so that orders, stops and money management can be implemented to best account for any eventuality. Unfortunately price alone shows a mixed message although with a bullish bias - so just going to have to see how things play out. My favorite use for common indicators is 5 period RSI of VIX, and a moving average of that RSI. It currently shows a bottoming out of VIX pull back, implying a rise. A rise in VIX will accompany selling; a dramatic drop in VIX would be bullish. Personally I think for an ideal short scenario I'd like to see some massive bullish speculation, a gap down in VIX and then a sharp reversal based on some event. :) On the other hand, I'm perfectly happy taking money in on the long side too. Just don't think its going to work out all that well... thank goodness I don't trade on my 'hunches'. Cheers Michael