|
PureBytes Links
Trading Reference Links
|
On Sat, 23 Aug 1997 12:24:22 -0700,
jbrady@xxxxxxxx wrote...
>jeff f brady wrote:
>closed above 7741! so were still in a dow uptrend?
I think the best thing todo is to give you something a bit more concrete to
grasp here.
1st JF basically measures the trend. Actually JF & Pre-JF measure a trend
numerically. And has the logical structure:
A is true
B is true
then
A and B is true.
A is the condition that Close > JF and B is the condition that Pre-JF > 0.
If both conditions are true then the trend is up. If both conditions are false
then the trend is down.
So for the Dow here is the close and the JF on a Daily basis(less decimal
places):
Note I will use a 1 day rate of change for the close to estimate Pre-JF.
Also note T- True, F- False
Date Close JF Daily ROC(Close) C>JF ROC Trend is
AUG14 7942 7916.71 N/A T N/A
AUG15 7694 7882 + F F Down
AUG18 7803 7761 + T T Up
AUG19 7918 7582 + T T Up
AUG20 8021 7846 + T T Up
AUG21 7893 8116 - F F Down
AUG22 7887 8020 - F F Down
AUG25 ? 7775.49 ? ? ? ?
Take a few minutes to study the table. Remember JF is generated the day before.
If the Dow will not close above JF there is weakness in the trend.
Does not show it in this table but there is another trend condition as well.
It is "Not Up" or "Not Down".
What does "Not Up" mean? The rule is this. If the trend is down and the next
day gives a mixed signal like F & T the previous trend is considered intact
untill a T & T occurr. The same holds true for an uptrend. It isn't a down
trend untill I get a F & F.
Now on a weekly basis there was:
Weekly JF Close Daily JF Weekly JF JF<C ROC Trend
AUG14 7942 7916.71
AUG15 7694 7882 8249.20 (Friday) F F Down
AUG18 7803 7761
AUG19 7918 7582
AUG20 8021 7846
AUG21 7893 8116
AUG22 7887 8020 7741.04 (Friday) T T Up
AUG25 ? 7775.49
*..
AUG29 ? ? 7569.08
So since on Friday it closed above 7741 the trend which began on Aug15 and
ended AUG22 was an up trend. Take a look at the chart of the DOW and it is
obvious.
So how does it work. Well lets pretend it is AUG15- Friday and my Daily JF is
7761 and my weekly JF is 7741.04. Knowing that the DOW closed at 7942.
SO Monday it closed at 7803. It blew the weekly and Daily JF out of the
picture. So you feel a bit comforatable that the DOW is headed up.
NOW it's Thursday and the last two days the Daily JF has been surpassed by the
close. But now you have a Daily JF of 8116 for Thursday.
And some where in the day you say hey this 8116 isn't going to be reached so
the trend might be weakening. But as you see it going below yesterdays close
you now know that the trend is headed down. So you could actually take a short
positon at the close of Thursday. Just in case it gaps down in the morning.
(Note I am also assumming that you would be looking at other indicators for
confirmation)
Also since JF & Pre-JF are calculated on the fly you will actually have Fridays
JF & Pre-JF right before the Market closes. SO you calculate a JF of 8020 and
tell yourself. Well do I think that the Dow is going to go up 127 points on
Friday after a 128 point loss on Thursday.
You would probable say no.
Now since you are a long term investor you feel that since the Fridays' close
on the Dow didn't fall below 7741.04. You feel that you will wait another week
to see if it is going to go above the weekly JF of 7569.08.
Oh that seems reasonable. But where is 7569.08 and where are we in our
daily short term down trend channel. I see that Friday we closed some where in
the middle of the channel. And if we close near JF by the end of the week we
are near the bottom of the channel. Also if we close any were below Fridays
close of 7887 it could be a "Not Up" week.
But lets take a look at the weekly data and produce another Raff Regression
Channel. We see that Fridays close on the Dow (using weekly data) is at the
bottom of the long term up channel beggining from the last correction in April.
So we could fall out of the channel.
Conclusion What I have layed out actually serves a better purpose for an
individual stock.
As far as for the DOW. It is headed down. Regardless of JF. Now JF will reflect
what the DOW will do but isn't a statistical predictor.
It is a Trend tool. It is a numerical analysis of the trend. And provides a
number (a hurdle so to speak) that determines weather the trend is in tact.
We know the market oscillates and the daily JF measures the small trends. The
weekly JF measures bigger trends and the monthly JF measures even a bigger
trend.
Errotion of a trend begins on the daily level and works its way through the
weeks and gradually to the months and Quarters. But this is the same
progression that occurrs when a trend begins.
So to give you a bigger picture the monthly JF is 8431. So by the end of August
do you think that the Dow will be above 8431. Now if we only have 5 days left
in the month that tells me that we have to average +108.618 everyday this week
on the DOW. I don't think so.
The real annalysis on the DOW comes from the graphs that I sent out to
everyone. That included Up/Down Vol ratio, NH minus NL, Total Volume, and
breakdown of the uptrend channel.
>From these charts it tells me that the trend is going to be down.
Harley Meyer
meyer093@xxxxxxxxxx
|