Well, I downloaded the data from CBOE and had it in a spreadsheet on a side by side with Nasdaq values for the past 18mnyths or so.
Conclusion - the EPC (equity) is mostly unreliable, taken alone. Even looked at oth (w the index RSI), not conclusive either.
Which other signals do you corborate it with?
here my findings:
- Since Mar'05 you can only find 2 valuees of 0.9 and above (when Nas is around 2050-60) - supposedly a buy signal, but only for a 40-50 NAS points.
-Close enough "buy" values (0.87 or so) are hardly indicating any market bottom at all. Back in March the index crashed after a week after an EPC 0.87 was reached and w/o the EPC signal going to extremes indicating any top is in place(like a sub 0.5) .
- Same for the EPC < 0.4 (sell), it is followed by a 3 months ramp to the highest 2360 where a neutral EPC of 0.51 is found...
Now the problem I see with all the clearstation.com and other sites is "selected evidence" to illustrate the point and not the other way around (predicting evolution based on the theory).
The same thing I did in this example to illustrate the EPC failures of indicating mkt tops or bottoms.
Thanks,
jet
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