Can Technical Factors Gauge What Works In The Stock Market? by Mark Vakkur
In the second part of this series
we look at the technical factors
you can use to gauge the
magnitude and direction of the
trends in the S&P 500.
Using only month-tomonth,
figures, it is difficult
to find any meaningful,
consistent information in the price performance of the Standard
& Poorís 500 itself by using
technical analysis. This does not
mean that technical analysis is
useless, just that when looking at
the monthly trend it is difficult to
find exploitable patterns.
ARE DOWN YEARS
FOLLOWED BY RISING ONES?
The rate of return indicator is one
of the oldest and most robust
gauges of the magnitude and direction
of an assetís trend. Trendfollowers
will buy an asset whose
rate of change is high and rising.
Swing traders can use it as an
oscillator, helping to identify periods
when the asset is oversold
(very negative) or overbought