A few weeks back Tim asked Slopers to submit tools and
indicators that accurately capture turning points in the market, and
specifically the March 2009 bottom. I
don’t remember who posted the weekly stochastic of the NYSE Summation Index
(sound off!). I made a comparison of the
summation index signals with a weekly chart of the Russell 2000 futures
(RUT). Signals are based on a simple
crossover of the 5,3 Stochastic once it hits extreme levels. Since September of 2008 there have been eight
sell signals generated, and each yielded a drop of at least 30 RUT points. Looking at the chart most signals produced
far more.
All bets are off for this market. Since the sell signal was generated last week the RUT rallied 18 points!
