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In some recent Worden Brothers notes the following
was posted.
A nice refinement of this scan is to allow for the
curvature of the N-Day MA. An industry that has an upward-curving MA, such as
Consumer Non-Durables (MG210), or Energy (MG120) as of today, clearly has a
brighter future than those that are going up but curving down, such as
Electronics (MG830) in Nov-Dec 2001. The x-day change in the N-Day MA, based on
its value x and 2x days ago is accounted for by a term (AvgCN - 2*AvgCN.x +
AvgCN.2x)/2. Although the derivation is simple, it is not relevant.
So the entire scan is
100*(AvgCN - AvgCN.x)/AvgCN + 50*(AvgCN - 2*AvgCN.x +
AvgCN.2x)/AvgCN
which gives the x-day projected increase in the N-Day
MA, with a curvature allowance. The answer comes out in percent.
Choosing N and x is something of an art. I have had
credible results with N = 20 and x = 25. The averaging time N should be large
enough to average out fluctuations, but not so large as to introduce excessive
lags. The projection time x is also the time over which the simple growth rate
is measured, and 2x is the time over which the 'curvature' is
measured.
All in all, this is a simple, one-shot scan that can
put all charts into descending order of expected performance over the next x
days. I concentrate on the upper end of the list, allowing that small
differences may not be significant because of the approximations involved. I
avoid industries at the bottom of the list at all costs. I found it essential to
check all results against the actual N-Day MA chart. Incipient reversals less
than x days can sneak in. This technique may be applied to Sir Measuring Man's
'clean universe' of industries, or to the major industry groupings themselves. I
look on the curvature term as a substitute for the difference of 50- and 200-Day
MA's used by Sir Measuring Man.
This may not be a substitute for the 5 days up
thing you were talking about but
in many ways has more appeal to me.
I applied this to the DOW-30 and the attached is
what came up.
- - - - - - - - - - - - - - - - - - - -
- - - - - - - -Clyde Lee
Chairman/CEO (Home of
SwingMachine)SYTECH
Corporation email: <A
href="mailto:clydelee@xxxxxxxxxxxx";>clydelee@xxxxxxxxxxxx 7910
Westglen, Suite 105
Office: (713) 783-9540Houston, TX
77063
Fax: (713) 783-1092Details
at:
www.theswingmachine.com- - - -
- - - - - - - - - - - - - - - - - - - - - - - -
<BLOCKQUOTE
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
<A title=profitok@xxxxxxxxxxxxx
href="mailto:profitok@xxxxxxxxxxxxx";>profitok
To: <A title=Omega-List@xxxxxxxxxx
href="mailto:Omega-List@xxxxxxxxxx";>Omega-List (E-mail)
Cc: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Saturday, March 30, 2002 1:44
PM
Subject: [RT] determine a trend
How does one look for suspects of a breakout ?
one simple idea is to scan all your stocks and commodities
for the following condition
a: made 3 higher highs in the last 5
days
b:made 4 higher highs in the last 6 days
or
a little overbought but a high probability
trade
made 5 higher highs in the last 5 day and closed up
each day
now if someone can code this over the weekend in
ela and scan their list
we can get someone to post the results for
Monday trading
nice holidays to all
Ben To
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