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Market Breadth Analysis
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ADX & VORTEX RULES:
WHEN RED (-DMI) MOVING LINE TOUCHS THE RED HORIZONTAL LINE AND WHEN GREEN (+DMI) MOVING LINE TOUCHS THE GREEN HORIZONTAL LINE, USUALLY AT THE SAME TIME = BUY ZONE
RED ON RED AND GREEN ON GREEN = GOOD
WHEN RED (-DMI) MOVING LINE TOUCHS THE GREEN HORIZONTAL LINE AND WHEN GREEN (+DMI) MOVING LINE TOUCHS THE RED HORIZONTAL LINE, USUALLY AT THE SAME TIME = SELL ZONE
RED ON GREEN AND GREEN ON RED = BAD
UPON A BUY or SELL SIGNAL, WAIT FOR THE MOVING LINES TO BEGIN MOVING AWAY FROM A PEAK AND BACK TOWARDS THE
CENTER. THIS IS TO MAKE SURE THE MOVING LINES DON%27T CONTINUE MOVING INTO A MORE OVERBOUGHT or OVERSOLD CONDITION.
IN OTHER WORDS, YOU ARE WAITING TO SEE THE TREND BEGIN ITS REVERSAL, USUALLY THESE TREND REVERSALS CONTINUE
FOR AN EXTENDED PERIOD
VALUE LINE INDEX, GEOMETRIC & AVERAGE
Average is a commonly used and well understood statistic, MEDIAN is also a common descriptor used to express a 'middle' value in a set of data. This 'middle' value is also known as the central tendency. Median is determined by ranking the data from largest to smallest, and then identifying the middle so that there are an equal number of data values larger and smaller than the middle value. A group of numbers in order from highest to lowest would be represented as: (x1, x2, x3, x4, x5). The median number would be x3 because it is in the middle of the group, with 2 numbers above and below x3.
Average is calculated by adding all of the numbers together (x1 + x2 + x3 + . . . Xn) and then dividing this total by the number of units (Xn) in the group.
In real estate, the median is always preferable, so too is the median better in the stock market.
In calculating average or median income in the USA, would you think average would be better than median? Answer is the median because the upper 1% has a LARGE income skewed to the upside.
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