"sexy saturday", page-5

I fall into the category of those who probably watch too many indicators and sometimes it causes paralysis by analysis. Every now and then I remove many of them but they keep sneaking back :-).

I do know trying to hang on to a trend that you saw technically, but now looks dubious, and now justify by fundamentals is fatally flawed. What I mean is don't let bad news now convince you the bear still exists. It may but switching to anything that supports your view is bad analysis IMO.

Anyway, I digress, the indicator I do wish to discuss is Ferrera's "opportunistic indicator".

I had mentioned it some time ago, as it gave a nice call at the Feb lows (even though it wasn't 14% off), and recently red or someone else asked me about it as it had given a buy signal, and I said I wasn't paying it much attention. I should have.

It is too complex to describe in full but works on the premise of a 18 day ma of A-D on NYSE. When it gets below 400 and the market has declined 14% then a up day is a buy. There are rules about being stopped out re-entreing and you would have.

Anyway, it gave a buy signal I ignored and the normal expectation is a 16% rally minimum, which would be a double top or slight new high over April.

In the long history Ferrera gives, there is one exception where the rally was just 6%. 1990 I think it was.

That 6% we have had sees the A-D ma move to +400, and we are there.

So this is the rare exception when this is it or else we revisit April highs based on his theory.

Sorry if that all sounds confusing but there are pages of details and charts from Ferrera's work that I can't reproduce here.