Bill, Last weekend at reply 1874 on the Intel Trader thread, I posted an experiment that I was starting:
"I'm playing, in my spare time, with a barometer of market direction. I've noted before that I'm impressed with the trends reflected in weekly MACD. So, I've divided the DJIA into seven "baskets" based on my observations of the weekly MACD: 1) Bullish signal issued this past week, 2) Bullish trend in place, 3) Bullish but pending change possible, 4) Bearish signal issued this week, 5) Bearish trend in place, 6) Bearish but pending change possible, and 7) Clear Indecision. My observed results:
1) 5 (S, UTX, AA, ALD, WMT), 2) 5 (MRK, EK, JNJ, DIS, MCD), 3) 3 (T, KO, PG), 4) 1 (MO), 5) 6 (XON, DD, TRV, HWP, IBM), 6) 9 (CAT, JPM, CHV, GM, GT, MMM, IP, UK, BA), and 7) 1 (GE). Let me know if you disagree with any of my classifications.
While it would be simplistic to just look at the bullish and bearish patterns, BAMBI (Berney's Analytical Market Barometer Index) will compare the sum of categories 1, 2 and 6 to the sum of 3, 4 and 5. Thus, Bullish = 19; Bearish = 10 equals bullish on market direction. Let the games begin! Comments or Suggestions from fellow Dudes and others are welcome."
Given, one week does not pattern make. However, category one returned 5.1% vs. 3.3% for the S&P and 3.6% for the DJIA.
This week BAMBI is 23 to 3 Bullish with 4 in the indecision category. Therefore, I'm looking for the market to be up. BTW category one only has two entrants: WMT and UK.
The experiment continues. I'll get you informed in the outcome. However, as you are so fond of saying BWDIK. By the way, Bambi was a newbie like me.
Berney |
