Forum Archive Index - July 2002

[Phaedrus <Phaedrus@techemail.com>]

 In these dark days of the Dow, it might be therapeutic to remind ourselves 
what a healthy uptrend looks like. This one has been running for about a year 
now, and illustrates nicely the use of simple trend indicators. Current price 
action is well clear of a confirmed trendline. Note how all price/moving 
average crossover signals were contradictory and useless when there was no 
trend during the first 8 months of 2001. 
 You can see clearly how a shorter term moving average signals more trades, but 
gives more timely signals. See also how, in a steady uptrend like this, nothing 
beats buying and holding. Observe the excellent trendline break entry signal.
 The most conservative investors often use a price/200 day moving average 
crossover as an entry/exit signal. See how this line is so far away from the 
action, that the price would have fallen substantially before a crossover would 
signal an exit to the trade. See how the 60/120 ma crossover acts as a trend 
indicator in its own right, albeit a fairly conservative one.
 Notice how time and time again, the price action has respected the 60 day ema 
- isn't that spooky, possums?

                    Phaedrus.

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