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SharePlanner (< 20)

SharePlanner Reversal Indicator

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June 16, 2012 – Comments (0) | RELATED TICKERS: SPY

We've got the Greek elections upon us, and with it their fate in terms of participation in the euro. I have about 4 long positions in my portfolio and that's all. I didn't want to get too hot and heavy with the market on Friday, but I didn't want to completely neglect it either, because the chart on the S&P looks to be in the early stages of a new uptrend. There really isn't any way to know what's going to happen in Greece nor the manner in which the market will respond. So I continue, as I always do and trade off of the charts that I have. 

Below you'll see the SPRI looking more favorable than it has in a long long time. 

Here's the SharePlanner Reversal Indicator:

 

For those of you who are not familiar with the SharePlanner Reversal Indicator, here's a quick tutorial...

The Indicator uses the advance/decline ratio with a stochastics overlay. The bottom half of the chart is the weekly candles of the S&P. The chart itself goes back two years. Some folks have criticized me for posting this chart in the past saying that it isn't 100% accurate - but if it was, as some think it must be, then I wouldn't be posting it - I'd save it all for myself and make an ungodly sum of money off of it. But it isn't perfect and there is always a level of error that you can expect from it. But overall, it is fairly accurate, and when the indicator hits certain extremes on the stochastics, it is often a good time to start hedging positions that are going against the direction of the indicators, or start loading up on short or long positions in-line with the direction that the indicator itself is pointing to.

Remember to pay the closest attention to where the %K & %D lines cross (i.e the red and green lines). This is typically where we begin to see changes in the behavior of the market - not always but quite often enough, to warrant our attention. What this tool is best for, in terms of what I use it for, is market timing and position building. When there is a crossover that goes against the positions in my portfolio, I, often times, look to take profits in those positions or at least hedge against them.

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