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There have been some comments about FFT, MESA, etc. and how they are used
in trading. The biggest weakness in all cycle software is when they
generate buy or sell signals when the price is in a trend mode. MESA will
do that so a built in trend filter is used to reject the trades. The chart
mesaOEX.gif is from MESA96. The forecast is for a downturn, but the
analysis says the index is in trend mode and longs should be held until the
trend changes. The cyclic components are noisier when the price is in
trend mode than cycle mode. The chart MesaOex2.gif is from Mesa For
Windows. Its bandpass indicator has been short for a few days. Looking
back over the chart, some trades have been good and others not so good.
Personally I am neutral on the mesa technique as I prefer a combination of
price, breadth and volatility to generate trading signals.
BobR
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