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Binary systems are very simple. Basically, you select a series of technical signals and give each signal a value of +1 (bullish) or -1 (bearish). For each chart, you then add up all of the values to get a final "score." You then look to see if the score is above (or below) a preset threshold.
Sean Gallagher's short list is a great example of a binary system in action. While it only has 2 charts in it (currently), you can see exactly how Sean is scoring things and drawing his conclusions. His $SPX chart includes the Dow Transports and Dow Utilities indexes also with things like the Advance-Decline line to come up with an overall US stock market score (which is currently bearish by the way). His second chart has similar information for the Canadian market.
Short and to-the-point, "AlphaDow Barometer Lite" shows how anyone can create a simple system for comprehensive, objective market analysis.
- Chip
