A COMPOSITE INDICATOR by Technical Analysis, Inc.
Interview subject Tim Hayes suggests a modified version of the composite indicator using just three indicators.
You refer to your composite indicator that is made up of subgroups. Can you tell our readers about
one or two indicators from each subgroup?
A lot of data and a lot of indicators go into our models. They're very, very broad, and there's too much in
there for an individual to try to update without a computer. So what you could do is put a model together
with just these three indicators, you take the same approach toward timing the market. Three indicators
would be, say, a Value Line slope indicator based on the 30-week momentum of the Value Line
composite (Figure 1). We found that if the Value Line momentum goes below -1%, turns around and
moves above that, that's a buy. If the Value Line momentum goes above 16%, peaks out and turns down,
that's a sell signal. Now that's a simple indicator that an individual can update simply by entering every
day what the Value Line is and calculate the 30-week momentum.