Possible Reversal Day ?
In Technical Analysis, there is this thing called "The Measured Move**". It describes the phenomenon where a major market advance or decline is divided into two equal and parallel moves.
Advances:
Mar 10 - April 16 : 1947.30 - 1,455.47 = 491.83
April 28 - May 8 : 2,283.84 - 1,791.45 = 492.00
Declines:
April 16 - April 28 : 1,947.3 - 1,791.45 = 155.85
May 8 - May 14 : 2,283.84 - 2,125.93 = 158.01 ( Intra-day figure )
Advances:
Mar 10 - April 16 : 1947.30 - 1,455.47 = 491.83
April 28 - May 8 : 2,283.84 - 1,791.45 = 492.00
Declines:
April 16 - April 28 : 1,947.3 - 1,791.45 = 155.85
May 8 - May 14 : 2,283.84 - 2,125.93 = 158.01 ( Intra-day figure )
The index is now touching 10 MA, CCI is low. We could, if the market so wish, to take today as the reversal day.
** Reference: Technical Analysis of the Financial Markets by John Murphy, Chapter 6 page 151
Labels: Market Direction
posted by Market Wizards @ May 14, 2009
Comments: 6
