Section 10:
Market Situation Scoring Summary
The Market Situation score will generally move between 2 and 3. Sometimes the Market Situation score will be 4 and 5, giving the clear signal to trade bullish continuation patterns. Other times, the score will be 1 or even 0, indicating that it’s a good time to focus on bearish continuation patterns or to stay mostly in cash.
The Market Situation scoring system is designed in such a way that it looks at the broader market from several different angles and over several different time frames. Some of the indicators change very quickly, such as the advance/decline line. Other indicators require long periods of time to change from bullish to bearish, such as the 200 day simple moving average in the broad market trend.
The indicators all work together to reveal a great picture of the condition of the market. Sometimes the market is oversold and primed for trading bullish reversal patterns. Other times the market is poised to breakdown and trend lower, which is the ideal time to be trading bearish continuation patterns. The Market Situation takes all of this into account, and more.
To learn how to tie all of the indicators together into a cohesive strategy, try the Trading Price Patterns Interactive Tutorial. The tutorial will show you how to bring it all together.
