11 replies to this topic

[spielchekr]

source: http://en.wikipedia....ictor_Sperandeo

The four day rule is Sperandeo's favourite pattern for a change in intermediate trend. The rule is

• In an intermediate trending move, a reversal in the form of 4 days against the trend is highly likely to be a trend change.

This rule is based on his examination of trend changes in the Dow Jones Industrial Average from 1926 to 1985. He defines a variant as the "four-day corollary",

• In an intermediate trending move, a sequence of 4 days with the trend followed by 1 against is highly likely to be a trend change.

This rule is looking for a climax over a series of days, instead of a single high-volume climax day.

Edited by spielchekr, 27 November 2008 - 09:33 PM.

[humble1]

good one and worthy of adding to the personal trading journal. thanks! i haven't thought about trader vic in years.

[atlasshrugged]

i think you have an easy short right here up into the 905 area on the es and right here up into the 1237 area on the nqs THE LOWS LAST WEEK HOWEVER ARE THE LOWS FOR THIS BEAR MKT...GOOD LUCK CREW!

[Cirrus]

source: http://en.wikipedia....ictor_Sperandeo

The four day rule is Sperandeo's favourite pattern for a change in intermediate trend. The rule is

• In an intermediate trending move, a reversal in the form of 4 days against the trend is highly likely to be a trend change.

This rule is based on his examination of trend changes in the Dow Jones Industrial Average from 1926 to 1985. He defines a variant as the "four-day corollary",

• In an intermediate trending move, a sequence of 4 days with the trend followed by 1 against is highly likely to be a trend change.

This rule is looking for a climax over a series of days, instead of a single high-volume climax day.

Great post...Trader Vic's stuff is simple and outstanding. I've read his stuff and like the 4 day rule along with his basic 2B bottoms and tops on a trendline break.

[humble1]

cirrus: please refresh me/us on vic's 2B. i used that many years ago to benefit and am embarassed to say it escapes me now. i have gotten so far into Time and Price and pi and phi and squares and square roots and moon and sun and astro and nevermind that my brain is a fried egg!

Edited by humble1, 27 November 2008 - 11:41 PM.

[draggen33]

For the everyday person this would mean that we get a down day after the last 4 days , and higher prices to follow , is that right? Or please explain to me in everyday terms other than get out or buy , thxs in advance

[spielchekr]

As it would apply to tomorrow, that might be an application of the variant he speaks of, but that would then have to be in the context of hindsight, after the fact. I think.

Edited by spielchekr, 28 November 2008 - 12:32 AM.

[spielchekr]

After having presented mostly bullish arguments most of the way down to here, Mark Hulbert has been rather intent upon finding the bull's flaws in his recent articles IMO, including this one about the four days up phenomenon. My point is not to bash Hulbert, but to have you read the sentiment posted below this article and observe his readership ripping him a new one for not being nearly bearish enough to their liking.

I suspect if Hulbert's point was statistically significant, he would have posted the numbers as he typically does. What he offers here instead is this opaque comment:

"On the other, the implications are negative of double-digit gains over a four-day period. More often than not, according to the historical record, the stock market on such occasions was a bit ahead of itself. On average, the Dow was lower one week later -- and lower six months later, as well."

More importantly, don't forget that Trader Vic makes the four day rule conditional upon its appearance after an IT downturn. There are indeed many instances where four-days-up double-digit-gains got swatted long after the initial four day turn had appeared and an IT rally had ensued. Remove the echos from Hulbert's data and you may walk away with a different perspective. Location, location, location.

Edited by spielchekr, 28 November 2008 - 09:16 AM.

[Cirrus]

cirrus:

please refresh me/us on vic's 2B. i used that many years ago to benefit and am embarassed to say it escapes me now. i have gotten so far into Time and Price and pi and phi and squares and square roots and moon and sun and astro and nevermind that my brain is a fried egg!

Trader Vic's 2B tops/bottoms is based on a break of the uptrend/downtrend and then a retest of the recent high/low. It's simple and logical. It is helpful because it allows you to establish a position in your time frame at an advantageous risk/reward point.

FWIW I think this method is VERY effective when combined with a couple other factors that help you establish an advantage.

[diogenes227]

cirrus:

please refresh me/us on vic's 2B. i used that many years ago to benefit and am embarassed to say it escapes me now. i have gotten so far into Time and Price and pi and phi and squares and square roots and moon and sun and astro and nevermind that my brain is a fried egg!

Trader Vic's 2B tops/bottoms is based on a break of the uptrend/downtrend and then a retest of the recent high/low. It's simple and logical. It is helpful because it allows you to establish a position in your time frame at an advantageous risk/reward point.

FWIW I think this method is VERY effective when combined with a couple other factors that help you establish an advantage.

So simple and works in all time frames - which makes Vic a trading genius.

Or as that other trading genius Henry David Thoreau said: "Simplify, simplify, simplify."

http://stockcharts.com/c-sc/sc?s=$NDX&p=D&yr=0&mn=6&dy=0&i=p34755076222&a=121581103&r=5638.png