FRED GOODMAN'S KEY INDICATORS FOR
Monday, December 23, 2002
another way of looking at the relationship of advances and declines and
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.
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
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.