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Hi all,
I sent this answer to Steven already, but may be itīs also interesting for other
people. So I send it to the list, too.
One additional remark: Donīt forget, that itīs very easy to see all these
signals retrospectively, but itīs much more difficult to recognize them during
actual trading - at it is even more difficult, to rely on and follow them!
> - Anyone else struck by the number of technical analysts who have been
> bearish (including me, although I'm an amateur) and wrong recently on the US
> market?
I try to rely on my own TA and use the opinions of other analysts only as
provider for ideas I havenīt seen.
> - I've been trying to determine what the technical indicators were recently
> (since 10/27/97) that should have cautioned me on my bearishness. (I'm
> putting aside the issue of "long-term" vs. "short-term" here. The fact is,
> I was/am very impressed by some massive tops and yet missed a 10% up move in
> the indices.) What should I have noticed? Here's what I have so far:
>
> - A simple 5,3 Stochastics on the weekly index charts would have been
> one caution around 11/1.
A 5,3 Stochastics seems to be useful only in combination with other indicators
or Stoch. time intervals. Iīm using additionaly 15,9 and 25,18 Stochastics.
The combination of 5,3 and 15,9 produced a buy signal at Oct 29, but the long
term 25,18 was still heading down, even showing an additional sell signal at
Nov 07.
A buy signal fitting my Stochastic system, published in this list some months
ago, was given at Nov 17.
> - A weekly default parameter MACD signaled something similar about the
> same time.
Also at Nov 17 "my" daily MACD sai "BUY", when crossing over itīs signal line
and forming a "failure swing" pattern.
> What else was there?...
At Nov 14, RSI(14) crossed itīs short term downtrend line, like the
MACD in a "failure swing" pattern.
At the same day the S&P500 closed above a resistance line formed by a line
through the closing prices of Oct 21. and Nov 05. Next dayīs higher prices were
the confirmation for the break and a buy signal.
My main tool: ROC, time intervals 5 and 12.
ROC(5) jumped up at Nov 03. directly into overbought area, but then fell back.
ROC(12) gave itīs buy signal at Nov 12, again an indicator with an "failure
swing" pattern.
Stoch RSI (according Chande and Kroll) said "Buy, short term" at Nov 03.
But such a signal isnīt too reliable. A mid-term confirmation was seen on Nov17.
So after all mentioned signals, staying on the safe side (combination of many
indicators), my "buy-day" was Nov17 at opening. This means, with this evaluation
you hadnīt got the full 10% (this would be pure luck, anyway), but entered the
market after half of the upmove (until today).
I hope, this answers your questions!
Thomas
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