PriceTeam

[PriceTeam]

Great question.

Won't have time to answer your specific question now. Gotta vacuum the house! ;)

This gets into the area of projections at which the Hurst analysts specialize. I've got some pretty good clues to work with around moving averages.

Here's a single example: If price is trending strongly above both the 20-day and 50-day ma's, and 43 days have passed since the last touch-back to the 50-day ma, the probabilities that price will cut below the 20-day and at least touch near the 50-day climb significantly higher with each passing day up to day 55. By day 55, 99 percent of all prices under all conditions will have touched back. This is just one tiny piece of data we can know about price behavior. And since price behavior is holographic, you can extend this bit of reasoning to several different ma's. So price tends to touch back to the 20-day about every 20 days on average (with many variations so each situation must be studied carefully.) Will get into this subject in detail. Right now, we are standing on the edge of the ocean and just making a few observations, kinda like ancient man pondering the tides.

About ma's, I've had several people inquire whether I use sma's or ema's. From here on out, let's make it a standard rule: If someone says "ma" they mean sma; otherwise, specify ema.

Correct me if I'm wrong, the ema uses a formula that causes the leading edge to turn faster than an sma. I have not found a significant practical advantage of the ema. If I want a faster signal, then I will simply drop to a lower sma, so the 8 turns faster than a 10-day ma, for example.

Ted

PS
Have tons more to say about ma's. My entire method depends on the close observation of ma's--every tiny detail--and especially the unique interaction of the ma's as time passes.

I'm convinced the ma's in combination yield many of the market's most important secrets--including how and why methods that appear to work in one phase cease to work in another!

However, let me quickly add this: I have found many if not most moving-average crosses to be unreliable! Learned this lesson in 2001, I think. A writer named Mailman--great trader--said, "Hey whenever the 13-day crosses below the 50-day go short. It's working like magic." So I dutifully studied the phenomenon, and sure enough, it worked like a steering wheel on a car. So I watched and waited and then saw a stock and the 13-day crossed below the 50, and I bought put options (expiration close by). The next market cycle launched upward, and I got creamed. It was about this time, I discovered Hurst and Airedale.