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Mikula Forecasting
Company: Strategy #20:
Moving Average 8 Lines
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Written by: Patrick Mikula CTA
Copyright (c)2003-06 by Patrick Mikula All Rights Reserved.
(Please to not copy or foreword this article).
Mikula Forecasting Company
P.O. Box 152672
Austin, TX 78715-2672
USA
www.MikulaForecasting.com
support@MikulaForecasting.com
====================
This strategy discusses the MarketWarrior indicator
Moving Average 8 Lines which will be referred to as MA8L.
This indicator draws eight moving averages on a chart. The
strategy for using this method is to watch for times when
all the moving averages are grouped together in one tight
group. The closer together all the moving averages are the
better. This tight grouping of the moving averages indicates
that the market is in a transition from up to down or down
to up. This method does not identify the exact bar of a
trend change it does identify the area where the market
cycles are turning. The first chart below shows Gillette
symbol G. In April at point A there was a tight grouping of
all the moving averages. After this tight grouping of the
moving averages the market broke upward and started a new up
swing. This method identified the time in mid April when we
would want to watch this market for a new change in trend to
start.
The next chart shows Intel symbol INTC. The moving
averages on this chart all grouped together at point A in
late June. After this grouping of the moving averages there
was the start of a new downward trend in Intel
stock.
Below shows the chart for Johnson and Johnson symbol
JNJ. This chart shows a tight grouping of all the lines in
the MA8L indicator in late July. Soon after this tight
grouping, the JNJ stock started a new up move.
The next chart shows J.P. Morgan Chase symbol JPM.
This stock is a financial institution and is a completely
different company than the previous chart showing Johnson
and Johnson which is a health care and home products
company. This chart has a very similar formation to the
previous JNJ chart. In mid August all the lines draw by the
MA8L indicator grouped together very tightly and the market
started a new uptrend.
MORE:
To see more examples of the Moving Average 8 Lines
indicator read the version of this article on the MarketWarrior
owners page.
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Mikula Forecasting Company