Info!! Persuasion Cycles Inwards The Stock Market

The recent post service on marketplace position momentum as well as Demand/Supply reflects business office of a larger conceptual framework that has served me good over years of trading. The theory is that the stock marketplace position moves inward aperiodic cycles inward which momentum extremes tend to precede cost highs as well as lows. I volition live on roofing this topic inward greater item during the summertime seminar inward Chicago as well as inward subsequent webinar events.

Any skillful theory should atomic number 82 to fresh, testable observations. Much of my proprietary enquiry follows from basic notions of thought cycles. From this research, nosotros tin gain trading insights, simply tin besides brand fresh observations to refine theoretical understandings. I am firmly inward the army camp of psychologist Kurt Lewin, who noted that "there is zero then practical every bit a skillful theory."

Take Thursday's breakout to the downside as well as marketplace position selloff, for example. Supply greatly exceeded Demand on the day, reaching an extreme higher upwards 200. If momentum extremes tend to precede cost extremes, nosotros should tend to meet lower prices next such an elevated Supply reading.

Going dorsum to like shooting fish in a barrel 2002, when I outset began calculating the indicator, nosotros accept had 32 instances inward which Supply has exceeded 190. Looking out 3 days, the marketplace position has traded below its depression of that solar daytime on 29 of these 32 occurrences--nearly 90% of the time. That is quite a flake to a greater extent than oft than the to a greater extent than or less 60% of the fourth dimension nosotros larn lower lows afterwards 3 days for the residue of the sample.

Knowing this tin help laid valuable swing trades, especially if nosotros utilise skillful intraday trading/timing to attain a favorable risk/reward profile for the merchandise as well as integrate historical patterns across unlike fourth dimension frames.

4:13 PM CT - Quick addendum to the post. If nosotros hold back at occasions inward which Demand is less than xx as well as Supply is greater than 100, nosotros honor that such skewed downside momentum besides leads to lower prices over the curt run, alongside 39 of 42 occasions trading below the depression of the momentum solar daytime inside a three-day horizon.
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