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Understanding Charts, Trip Lines, Bull/Buy and Bear/Sell Signals

Understanding the Mid-term Indicant Charts.

Bull/Bear Signals-The Red Blocks identify bull/buy signals. Only two events trigger bull/buy signals. The price must climb above the Short-term Blue curve and Force Vectors must climb above Vector Pressure. Bear/sell signals require much more: 1) Price must fall below Short-term Green. 2) Force Vectors must be in bearish domains. 3) Force Vectors must be below Vector Pressure. 4) Force must be sloping downward. 5) It cannot be a Red Bull. There a few exceptions to these rules shortly after bull/buy signals are triggered.

Bear/Sell Signals can occur shortly after buying (or a bull signal) and does not require very many supporting attributes. Shortly after signaling bull/buy, a Trip Line is extended to the right and equal to the bull/buy price.  The most dangerous time in holding a stock or any investment instrument, including a house, is shortly after buying it. The Trip Line helps identify a mistake sooner than later. So, when the price falls below the Trip Line, below Blue, and with Force below Pressure, a bear/sell signal is triggered. That occurred with bear signals 02, 06, and 08 above.

Notice the small A just to the right of Vector Pressure on the above chart. You will notice the S&P500 fell below the Short-term Green curve, while Force Vectors were rising. There was no bear signal because Force was rising.

Notice the small B on the bottom of the chart and just above this comment. You will notice bullish spurts. You will notice the price never crossed above the Short-term blue curve. Therefore, there was no bull/buy signal. These same rules apply to stocks and funds with a few exceptions. From time to time, fundamental oversight will override technical bull/buy signals for specific stocks and funds. Research is underway to improve performance based on collateral support from the other indices and certain mutual funds.

Notice the letter, C, on the above chart. The S&P500 Index fell 13% in mid-1975, spanning 9-weeks. Although unsettling, it was a bearish spurt. A bear signal was not triggered because the rules for doing so did not qualify a bear signal. The short-term trader will not find that appealing. The Mid-term cycle is designed to minimize trading, while maximizing worth. The short-term trader may find more interest in the Short-term Indicant.

Notice bear signals #10 and #02. Bear signal #10 occurred because price fell below the trip line before Green crossed above the bull signal price. But that is not enough. Force must also fall below Vector Pressure and into bearish domains. Bear signal #10 may appear to be out of place, but it is simply the last bear signal on the previous five year chart. The prior post election year is shown on all subsequent charts and the last signal in those prior post election years is numbered on the prevailing chart.

About six months after bull signal #03 was triggered, the short-term Green curve passed above the trip line. At that time, the trip line is deemed useless as the short-term green curve is now the underlying attribute that will trigger a bear/sell signal.

 

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