Yes, it didnt load the way i posted it. my apologies.
let me explain:
These are the signals for the 2nd stage of a bull market according to Dow Theory (Increasing Earnings)
They are in order of importance according to me. You can change the order if you disagree.
Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
Column 7
Column 8
Column 9
0
Earnings increases emerging
1
Significant corrections end higher
2
Fundamental values return to normal
3
Good news is announced
4
New companies are being floated
5
Employment picks up
6
Household Saving Ratio Falling
7
Sector rotation
I then give them a score, and whether each section is active or inactive.
I total the scores, and also separately indicate where they sit as to be active or inactive for the signal of each market phase. (see market phases below.)
You will see that i have calculated that 75% of the Section totals are positive for this Phase of the market.
The Score Total is the addition of the scores from my numerical weightings. ie 86% of the scores are positive for the market going up. (This is a more speculative part of the exercise - what to weight each category.)
Column 1
Column 2
Column 3
0
Section %
75%
25%
1
Score Total %
86%
14%
So, of all Section signals for the second stage of a bull markets to exist is: 75%. This tells me - the market is probably going up.
The Score Total of 86% tells me the weight of the signal - it is strong.
So, market going up broadly with the signal being strong.
Please be aware that I have designed the weighting "tool", and have not tested it. I think you will find that most people report Dow Theory as either an event happening or not.
You should know that there are 6 phases to markets according to Dow Theory.
These are:
Column 1
0
Bull Market Phase One: Reviving Confidence
1
Bull Market Phase Two: Increasing Earnings
2
Bull Market Phase Three: Rampant Speculation
3
Bear Market Phase One: Abandonment of Hopes
4
Bear Market Phase Two: Decreasing Earnings
5
Bear Market Phase Three: Distress Selling
We are in Bull Market Phase Two: Increasing Earnings.
Again, let me know if you need more help with this. Its a relatively large area of study and I dont think I have explained it very well?
