The following is a theorem I have constructed based on principles from T Theory ™ and Money Flow Ts ™ intending to resolve the two. As some of my older readers may know, I have explored the development of Ts spanning intraday or for slightly longer time frames. The following theorems will prove valuable in improving the reliability of shorter time frame Ts.
Theorem:
A T is a comprised of a centerpost, a right arm and a left arm (axiom)
The left arm is the cash buildup phase (axiom)
The right arm constitutes an uptrend (axiom)
A Money Flow T ™ is an uptrend whose midpoint is a peak in MFI (axiom)
Hence, a money flow T is the right arm of a T (theorem 1.)
Hence, a money flow T is equivalent in temporal-length to the left arm of a T (theorem 1.a.)
Hence, there is a peak in MFI at the midpoint of the right arm of a T (theorem 1.b.)
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In other words, a Money Flow T ™ describes a property of the right arm of a T, namely, a peak in MFI at its midpoint.
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One application of this theorem is that if one constructs a T in the traditional fashion, one would expect there to be a peak in MFI at the midpoint of the right arm. If there is a peak in MFI, this confirms the T construction. If there is no peak, then there is some misplacement in the left arm or the centerpost of the T.
Alternatively, if there are a couple of possible Money Flow T ™ constructions, one can extrapolate the left arm of a T for both constructions (theorem 1.a.) and see which one fits best into a cash build up period. Here is a step by step example of such a process:
George:
ReplyDeleteGreat analysis!!!! I know that you were about the ONLY one projecting a top at the end of April 2010. Not to be critical of Terry, because he has done some great work, but I know he was at the time forecasting a top in mid to late May 2010.
As one of your "old" readers I can attest that your call for a late April 2010 top was one of the best calls by anyone in 2010.
I am curious, was the forgoing methodology how you made that call in 2010???
Thanks again for this blog. Keep up the great work.
John C.
Thanks, John. You're too kind. I've had plenty of poorer calls since.
ReplyDeleteI discovered these Theorems only a couple of months ago.
The April peak was based on a simple T construction: I treated the November 2008 low and the March 2009 low as a double bottom. The left arm of the T spanned from the October 2007 top (obviously a logical place to start the T) to the November low. The right arm started at the March low--expiring in April 2010.