Indicators

Sector Sum Indicator

This daily indicator ranges from a score of plus 45 to minus 45, describing the status of all Bullish % industry sectors as one sum. Scores the daily status of 45 Broad Industry Bullish % charts. Each sector has a designated  possible value of -1 to +1. The ranking depends on chart status (+1 bull confirm or correction; +0.5 bull alert; 0 bull top; -0.5 bear alert; -1 bear confirm or correction). The sum is plotted on a 1-pt/box p&f chart. It generates early warnings of trend change from extreme readings. While on a buy or sell from extremes, reversals up or down will confirm short term potential moves in the opposite direction, already signalled by the short term composite.

Index Breadth

These indicators measure the breadth of trends within a particular index and are best known for their use as “contrary indicators” and valuable tools for market timing. They work on the principle that once virtually all members of a particular stock index are participating in the same market movement then there is a strong probability that this market movement will come to an end in the near future. This phenomenon of over-extended trend conditions is classified as being “overbought” or “oversold”. It is a good sign when both the stock market averages and the breadth are moving up in conjunction. When the averages are moving higher, but the breadth is declining, it is said that the “generals” are advancing, but the “soldiers” are retreating. This is a negative situation most of the time. It is a negative sign when both the market averages and breadth are moving down.
In some markets, breadth is stronger than the averages. This means the average stock is doing better than the averages. This is a pretty good sign, but not as good as when both of them are doing well.

Broad Industry Group Breadth

Measures Breadth within sectors & indices.

Advisor Sentiment Charts

The Advisors Sentiment report surveys the market views of over 100 independent investment newsletters (those not affiliated with brokerage houses or mutual funds) and reports the findings as the percentage of advisors that are bullish, those bearish and those that expect a correction.
The report has been widely adopted by the investment community as valuable anecdotal evidence as to extremes in investor confidence: conditions which are often seen at major market turning points.

II Short Term Composite Indicator

Generated from scores awarded to 29 market indicators (unweighted) and is only concerned with the most recent action. The Indicator oscillates between values of 0 and 100 and provides the first indication of short term moves. Typically, it detects potential up moves from “oversold” readings and down moves from overbought readings. Confirmation from the NYSE % 10-wk indicates a broadly tradable move, otherwise it is for the very short term.

II Long Term composite Indicator

This is a proprietary indicator generated from the scores awarded to over forty indicators. These indicators have been selected across a wide range of disciplines covering index trends, breadth, sentiment, money-flow and financial/economic factors. The scores awarded to each indicator are weighted to create an indicator that generates signals at market extremes i.e. buy signals at market bottoms and sell signals at market tops. It became apparent to us that we needed to apply more emphasis on leading indicators and therefore weightings are dependent on each indicator’s predictive value rather than its trend following capability.

Trend Score

Proprietary Indicator which ranks a universe of stocks form a score of 100 to minus 100 in order to quantify the strength of stock trends.

Risk Score

Modifies the six month beta of a stock by measure of relative overextension either on the upside or the downside to give a clearer definition of the short term risk of a stock

Volume Adjusted Price (VAD)

Proprietary Indicator which weights the price action of a stock for buying or selling pressure.

VAD weights the day’s trading volume according to where the stock price closed within its daily range. This operates under the idea that a day’s buying volume is more significant when the close price is nearer the top of the day’s trading range, and vice versa for selling volume. This is a much more visual indicator than normal volume bar charts and is used to identify potential reversionary action in a stock price at points of divergence between the price and the VAD.

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