studying stock market trends
February 27, 2014
Most daily signals remain bullish, but the SPY/TLT (shares/interest rates) ratio edged to a bearish signal on 26 February. The study anticipated the previous peak 12 days in advance. Historically, the ratio has done a better job of confirming declines than anticipating them. Maybe the ratio’s behavior is changing or maybe it is giving us several week’s notice.
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Financial markets are predictable because segments of price action fit together in a limited number of patterns that are not random. Markets are unpredictable too because there is enough variability in the patterns to hide the trend at some stages of development. I am fascinated by the market and spend a lot of time working to identify price trends so I can exploit them for profit.