The higher upwardly nautical chart depicts a running cumulative full of purchase signals minus sell signals for all NYSE stocks for the Wilder Parabolic SAR indicator (raw information from the splendid Stock Charts site). It has been a useful overbought/oversold stair out for the wide stock indexes. Note how we’ve bounced off an oversold score recently.
Interestingly, going dorsum to June, 2014 when I began collecting these data, daily purchase signals bring correlated amongst daily sell signals past times alone -.35. If nosotros merely perform a median dissever of the purchase signals, nosotros notice that when nosotros bring a high lay out of purchase signals, the side past times side 5 days inwards SPY average a hit of alone +.01%. When nosotros bring had a depression lay out of purchase signals, the side past times side 5 days inwards SPY bring averaged a hit of +.31%.
I compute like stats for the Bollinger Band; CCI; ADX; in addition to RSI indicators in addition to notice value inwards tracking purchase signals in addition to sell signals, also every 2nd cumulative running totals of their differences. Treating purchase signals in addition to sell signals every 2nd distinct variables ends upwardly offering unique value–it’s a rattling dissimilar agency of making purpose of traditional technical indicators.
Further Reading: Tracking Market Strength