Intelligent Investing’s Buy-Sell Indicator: The A.I.

Our Buy/Sell indicator is called the A.I. and is available to premium I.I. members only. Please go to the membership page to become an I.I. premium member now.

It is based on three Technical Indicators that oscillated between 0 and 100. Readings below 20 are oversold, readings above 80 are overbought. This indicator works on all time frames from minutes to months. Strong signals are when for example the daily signal is followed a few days later by a similar weekly signal, etc. The indicator is based on closing prices on all time frames.

There are four types of signals:

  • Ideal buy/long signal: all three TIs move from <20 to >20 at the same time. However, it has been observed that the signal also works when all 3 TIs switch from pointing down to up at the same time. This signal most often coincides with the start of an impulse wave after a correction.
  • Ideal sell/short signal: all three TIs move from >80 to <80 at the same time. However, it has been observed that the signal also works when all 3 TIs switch from pointing up to down at the same time. This signal most often coincides with the start of a larger correction.
  • None ideal buy/long signal: not all three TIs move from <20 to >20. They do switch from down to up at the same time, but often the shorter period TI is already >20. This signal most often coincides with corrective b-waves.
  •  None ideal sell/short signal: not all three TIs move from >80 to <80. They do switch from up to down at the same time, but often the longer period TIs remain above 80. This signal most often coincides with either 2nd or 4th waves within an impulse wave up.

That sums up our indicator and helps us better identify if we should buy, or sell, or not (e.g. don’t long a b-wave or don’t sell the 4th wave). The indicator gives signals well-before say a MACD buy or sell crossover, allowing to be on the right side of the trade far longer. It doesn’t, however, nail the exact bottom or top. For example, on a daily time frame it will be 1-2 days after a bottom or top is struck. This however reduces risk and allows us to be on the right side of the trade with more confidence. We rather capture 80% of a move with 100% confidence, then 95% of a move with 50% confidence.

The last 2 ideal buy/sell signals on the daily time frame occurred early October 2015 and early December 2015. Since then all buy and sell signals have been none-ideal….

 

4 thoughts on “Intelligent Investing’s Buy-Sell Indicator: The A.I.

  1. Pingback: S&P, DOW, NYA, NAZ weekly charts technical review: bullish or bearish? | INTELLIGENT INVESTING

  2. Pingback: The BIG move came, is another around the corner? | INTELLIGENT INVESTING

  3. Pingback: Our Proprietary Buy/Sell Indicator, the A.I., once again led the way. | INTELLIGENT INVESTING

  4. Pingback: Goldminers (GDX): Finally ready to soar? | INTELLIGENT INVESTING

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s