Marvel,
I treat stock market analysis as if it was no different to traditional statistical analysis. To analyse past data in order to predict the future with a certain level of probability, I put my faith in LINEAR REGRESSION and STANDARD DEVIATION.
There are several "outputs. The LR line gives you the slope of the prevailing trend. Placing 1 SD above and below the LR line defines where 90% of the data points are. 2SD=95%, 3SD =99%.
So if you have an up trend and the latest data point falls below the lower SD line, which is only a 5% occurence. (100% - 90%)/2., you have a tradable position. Either the trend is over, or the price must come back into the SD channel.
If you can find a stock/index where the LR line is close to horizontal then the 2 SD lines give you the perfect trading ranges to deal off.
It's horses for courses, not everyone will like this!
By the way, jealous that you live in Toronto. I love that City!
regards, G McA
