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November 22, 2005 Report for the Five Major Stock Indices |
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Below is an explanation of the three windows of the charts and a description of each of the indicators. In the top window is my internal strength indicator (represented by a bold blue line) this measures the strength of the security in relation to its movement between the upper and lower 3rd alpha wave bands. The internal strength indicator is considered overbought above minus twenty (-20), and oversold below minus eighty (-80). In addition to the internal strength indicator there are two other indicators. The thin blue indicator represents the value of the last time the internal strength indicator reversed direction to the downside. The thin red line represents the value of the last time the internal strength indicator reversed direction to the upside. In the middle widow the Long/Short position is indicated, one (1) represents a long position, minus one (-1) represents a short position. A zero (0) represents a neutral position. The Bold blue line is for long term traders and the thin red line is for short term traders. In the bottom chart the main trend line for a security is the Alpha Trend this is represented by the bold red line. It is from this trend line that all other support/resistance lines are developed. The Alpha Trend is an adaptive moving average that uses proprietary mathematical formulas to create the base line movement of the selected security. From the Alpha Trend, I then created three separate progression/regression price areas using Fibonacci ratios, which I call the 1st Alpha waves, 2nd Alpha waves and 3rd Alpha waves. It is these three wave areas that define the vast majority of a security's price movement. Moving out from the Alpha Trend, the 1st Alpha waves are represented by the dark blue lines. This is the price range that a security will normally move to once the Alpha Trend line is crossed in either direction. Next are the 2nd Alpha waves which are represented by the light blue lines. It is this area between the 2nd Alpha waves where 79.82% of the time a security's price will remain. Last are the 3rd Alpha waves which are represented by the violet lines. Once a security's price reaches this area it is in an extreme overbought/oversold condition. A security can stay in this area for awhile, but this usually represents a poor price in which to place a trade in the prevailing trend. The next four moving averages are the one year moving average of the Alpha Trend represented by the bold violet line. The timeframe for this moving average is the following, on the daily chart it is 240 trading days, on the weekly chart it 52 trading weeks, and on the monthly chart it is 12 trading months. The next moving average is the short term alpha trend line represented by the bold black line. The next moving average is a simple moving average of the lows when the internal strength indicator is trending up. This moving average is represented by the Bold Blue line. The last moving average is a simple moving average of the highs as the internal strength indicator is trending down. This moving average is represented by the Bold Green line.
DJ TRANSPORT The current short term traders' position is Long.
DJ TRANSPORT Weekly
DJ UTILITY The current short term traders' position is Long.
DJ UTILITY Weekly
Dow Jones Industrials 1900-99
Dow Jones Industrials 1900-99
NAS/NMS COMPOSITE
NAS/NMS COMPSITE Weekly
S&P 500 NDX Continuous 
S&P 500 NDX Continuous 
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Erich K. Soltes A graduate of Brookfield High School in Brookfield CT and an Eagle Scout, Erich went on to graduate from SUNY Maritime College in New York City in 1988, with a BS in Marine Transportation and a minor in Economics. For the next ten years he was a Navel Reserve officer and a Merchant Marine officer. In 1998 he went to work on Wall Street obtaining his series 7, 63 and 65 licenses. He worked both as a stockbroker and a financial planner helping clients obtain their financial goals. In 2004 he was able to finally reach his goal of developing a mathematical trading model that could beat the "buy and hold" method of investing. In mid 2005 the Alpha Trend Analysis website that you see before was created. DISCLOSURE: Alpha Trend Analysis, does not represent the accuracy nor does it warranty the accuracy, completeness or timeliness of the statements made on its web site or in its email alerts. The information provided should therefore be used as a basis for continued, independent research into a security referenced in this article so that the Subscriber forms his or her own opinion regarding any investment in a security mentioned in it. The Subscriber therefore agrees that he or she alone bears complete responsibility for their own investment research and decisions. We are not and do not represent ourselves to be a registered investment adviser or advisory firm or company. You should consult a qualified financial advisor or broker before making any investment decision and to help you evaluate any information you may receive from this article. Consequently, the Subscriber understands and agrees that by using any of Alpha Trend Analysis services, either directly or indirectly, Alpha Trend Analysis, shall not be liable to anyone for any loss, injury or damage resulting from the use of or information attained from Alpha Trend Analysis or any of its services. Copyright © 2005 Alpha Trend Analysis Image rendition and html coding Copyright © 2000-2009 SafeHaven.com ADVERTISEMENTS
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