The simple rule that I use to identify the prevailing swing trade direction (approximately 2-10 weeks) is this: when all seven go to buy mode, that is a buy signal that stays in effect till all seven go to sell mode, which then triggers a sell signal, which stays in effect till....etc. I won't go into "early warnings" at this point.
The exception to that rule is that when the seven go to a buy or a sell without confirmation by the direction of the moving averages, I regard that as a likely whipsaw. For example, if all moving averages are moving down, and we get an upside crossover on all- then that is likely either a false or a premature buy signal. If, on the other hand, the moving averages had already turned in the direction of the crossover, and particularly if they had already set up positive divergences prior to the crossover, then I put a whole lot of faith in the SS's message.
You may find them useful; you may not. Trading is a very individual business. Others have their own effective methods, and that's how it should be. Here are the definitions I use for each, individually, to determine a buy or sell signal:
1. $BPCOMP- when the daily reading crosses either from above into the BB, of from within the BB to under the BB, that is a sell signal for this one indicator. A buy signal is generated in exactly the opposite way.
2, 3, 4, and 5- when the daily reading crosses downward through the MA from above the MA, that is a sell signal for this one indicator. A buy signal is generated in exactly the opposite way.
6 and 7- when the daily reading crosses upward through the MA from below the MA, that is a sell signal for this one indicator. A buy signal is generated in exactly the opposite way.
http://stockcharts.com/c-sc/sc?s=$BPCOMPQ&p=D&yr=0&mn=6&dy=0&i=p03557278111&a=132243312&r=4199.png
http://stockcharts.com/c-sc/sc?s=$NAMO&p=D&yr=0&mn=6&dy=0&i=p95694935821&a=132241851&r=4369.png
http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&yr=0&mn=6&dy=0&i=p67690834570&a=132240665&r=9880.png
http://stockcharts.com/c-sc/sc?s=$NAHL&p=D&yr=0&mn=6&dy=0&i=p28936177142&a=132242597&r=8810.png
http://stockcharts.com/c-sc/sc?s=$NYHL&p=D&yr=0&mn=6&dy=0&i=p11594829525&.png
http://stockcharts.com/c-sc/sc?s=$TRINQ&p=D&yr=0&mn=6&dy=0&i=p85753661837.png
http://stockcharts.com/c-sc/sc?s=$TRIN&p=D&yr=0&mn=6&dy=0&i=p78330912829&a=132242143&r=4628.png
Edited by IYB, 22 March 2008 - 03:07 PM.