FRED GOODMAN'S KEY INDICATORS FOR INVESTMENT SUCCESS
Thrust Oscillator
Monday, December 23, 2002
Fred Goodman
Here's another way of looking at the relationship of advances and declines and up/down volume.

The Thrust Oscillator is another way of looking at the same inputs that make up the Arms Index and the Breadth Volume Oscillator. It has been under study by me for several years. It is a member of the 29-indicator Summary Index. It has been very accurate, and it last produced a sell signal on December 4, with the S&P 500 at 917.57 -- so I thought it best to explain it at last. A look at the chart reveals that the signals are a bit late, but that the market moves continue for a considerable period after a signal is produced.

To produce the indicator, the following equation is evaluated:

((Advances X Up Volume) - (Declines X Down Volume)) / ((Advances X Up Volume) + (Declines X Down Volume))

A 21-day moving average is calculated and plotted as the pink line below. Then a 13-day moving average of the 21-day moving average is calculated and plotted as the blue line.

A sell signal occurs when the pink line, having exceeded 0.2 turns down and penetrates the blue line, which has also turned down. A buy signal is the reverse, but the pink line must drop below -0.195 to capture all of the buy signals shown below.

Thrust Oscillator Through Friday, December 20th

Fred Goodman, CFP, is a fee-only Certified Financial Planner based in Los Angeles. You can send him your questions and comments via email at Fred@MarketMonograph.com. The charts and commentary represent what Fred is thinking about the market and thinking of doing for his own account and for accounts he manages. There is no guarantee that you will profit from trading as discussed herein. You may lose money and Fred assumes no responsibility for what you do or do not do with this information.