Do Kangaroo tails predict that a market has stopped going down? I have made an indicator that looks at whether the market has managed to close beyond the extreme of the tail within 10 days. I have only used instances where the 10-day moving average is moving in a direction opposite to the 200-day moving average (the results are dreadful otherwise). The question is whether the tail predicts an end to the counter-trend move in the short term.
Here are some results (Time period is 30 years for equities and max. available for other markets — c. 8 years for futures and 10 years for currencies; “long” and “short” should be taken as the direction you would need to trade to close a position — i.e. it is a “long success” when the market has been going down and stops (for at least 10 days) after a kangaroo tail).
I must say, it's delightfully surreal reading this blog with all its bulls and bears and kangaroo tails :). Good to see you the other day!
I agree with Susie.Perhaps it is time to unlearn what you have learned during the last year and (as the great trader called Yoda also said) feel the force/trade rather rely entirly on hard-deaded analysis and formalised processes.
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Susie: Very good to see you too! I have my worry dolls with me in the office. It's nice to have someone to talk to -twitch- -twitch-.