No. of Recommendations: 11
Juan asked:
Please, do you have any favorite indicator or tool to distinguish between a bearish and a bullish environment?The key to identifying the environment is achieved not by having any one or two favorite indicators, but rather, by having an arsenal of indicators that are tracked in unison and combined to arrive at a consensus. Some of the indicators identify bearish conditions only, while others identify bullish conditions only, and then you have some that identify both. The key is to track these on a daily basis and then act on the clear signals they produce. Let me illustrate with a chart of the long-term indicators I track. The green line is the consensus of the bullish long-term indicators, while the red line is a consensus of the bearish long-term indicators.
https://www.zeelotes.org/LT_Consensus_Signals.PNGIn late August of 2021 the two lines crossed which issued a warning that it was time to begin exiting long positions and begin taking on a defensive posture.
At the start of October 2022 the two lines crossed back with bullish indicators rising above bearish indicators. This was a sign that it was time to do the opposite.
This sets the stage for a change in perspective. Intermediate and short-term indicators actually identify the exact point to act. On the bullish side, for example, that signal came on 10/13/2022. So the long-term indicators prepare you for action, while the other two tell you when to actually pull the trigger.
