Double Barrel Buy Signal Says Market Timer Frank Kollar
September 21, 2007 (FinancialWire) (By Frank Kollar)
Tuesday’s huge rally was the second momentum thrust day in three weeks, signaling a new rally that will take the stock market considerably higher over the next 6 to 12 months.
Back on August 31 st, we wrote that the stock market had just experienced what is called a momentum thrust. Advancing volume outpaced declining volume by a ratio of 20 to 1 on the NYSE, and by a ratio of 9 to 1 on the Nasdaq.
Days when trading volume exceeds the 9 to 1 ratio on the NYSE are a rare event. Historically, having two such days within a ninety-day period forecasts a 10% to 14% market advance over the coming six months to a year.
In this Tuesday’s rally, after the Fed cut Fed Funds and the Discount rate by ½%, advancing volume outpaced declining volume on the NYSE was an amazing 30 to 1. We have never seen this ratio so high.
This second momentum thrust completes the requirements of a Double Barrel Buy Signal and forecasts a new rally over the coming year.
Follow your strategy and adhere to money management rules to protect capital. If you do not have money management rules, give FibTimer.com (http://www.fibtimer.com) a call. The surest way to lose money in the stock market is to trade without a plan.
Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
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