{"id":20143,"date":"2012-08-12T18:04:51","date_gmt":"2012-08-12T22:04:51","guid":{"rendered":"http:\/\/www.thedisciplinedinvestor.com\/blog\/?p=20143"},"modified":"2016-09-20T12:20:55","modified_gmt":"2016-09-20T16:20:55","slug":"market-trend-indicator-update-markets-not-in-equilibrium","status":"publish","type":"post","link":"https:\/\/thedisciplinedinvestor.com\/blog\/2012\/08\/12\/market-trend-indicator-update-markets-not-in-equilibrium\/","title":{"rendered":"Market Trend Indicator Update (Markets Not In Equilibrium)"},"content":{"rendered":"

We have been working on both back-testing and the potential for the Market Trend Indicator as well as the Key Reversal Indicator for a while now. We want to make sure that it is solid not only from a historical perspective; but indicators that are reliable moving forward.<\/p>\n

What you are seeing below is the output from a complex set of calculations that take into consideration several measures that have been \u00a0 provide insight into when a market is overheating and when it is oversold. For now, we are using the S&P 500 as the base index and will eventually expand to a customized index that will include the Russell 2000 as well.<\/p>\n

The KRI gauge provides a reference of the current position (red arrow) and the day before (grey).<\/p>\n

\"\"<\/a><\/p>\n

The temperature of the market (trend) is shown below. It graphically shows a longer-term view of how markets\/investors have been behaving. This measure includes a range of instruments along with the range of trading and the directional strength.<\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

To get a feel for the history, we are charting the KR Indicator (KRI) to view how accurate (or not) it has been at predicting potential turns on a short-term and longer-term basis. Often times, the reversal will occur when there is a spike in the KRI (see lower chart for examples).<\/p>\n

Right now, as market have been moving somewhat “smoothly” regarding the up\/down action, there does not appear to be a massive warning flag that is appearing. However, markets are not in “equilibrium” as seen below and in the gauge above – indicating that a draw-down is nearing. If our indicators are working properly, we would expect that some digestion\/consolidation<\/em> of the recent gains will be seen shortly.<\/p>\n

If not, then the KRI will rise and show a greater likelihood of a reversal of an \u00a0 overheating condition.<\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

We have been working on both back-testing and the potential for the Market Trend Indicator as well as the Key Reversal Indicator for a while now. We want to make sure that it is solid not only from a historical perspective; but indicators that are reliable moving forward. What you are seeing below is the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[12,42],"tags":[490,165],"class_list":["post-20143","post","type-post","status-publish","format-standard","hentry","category-markets","category-stocks","tag-stocks","tag-technical-analysis","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"acf":[],"_links":{"self":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/20143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/comments?post=20143"}],"version-history":[{"count":0,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/20143\/revisions"}],"wp:attachment":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/media?parent=20143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/categories?post=20143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/tags?post=20143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}