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ATMASphere Aug 2014

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Dow Award series<br />

The Charles H. Dow Award is recognition for excellence and creativity in<br />

technical analysis annually attributed by the MTA.<br />

The research is about a substantive topic (indicators, strategy or system)<br />

based upon the concepts of technical analysis.<br />

The paper includes data that covers at least one full market cycle and it<br />

must be back-tested with statistical methods.<br />

The analysis and conclusions obtained search to be useful to enhance the<br />

understanding of market action.<br />

The presentation in this edition is<br />

Dow Award 2001 – Sign of the Bear<br />

By Peter G. Eliades<br />

His author shares his experience about what he was looking for and how<br />

the research was developed.<br />

Since his point of view, he attributes some kind of serendipity on in making<br />

meaningful technical discoveries.<br />

In November 1992 he was struck by the apparent lack of volatility in the<br />

daily number of advancing and declining issues on the New York Exchange.<br />

Over a period of 21 trading days, the highest single day closing<br />

advance/decline ratio (1) was 1.84 and the lowest was 0.71.<br />

At that time author felt that it was a very small range for a full month of<br />

data, so he decided to wide that range between 0.65 and 1.95 and search<br />

for the same pattern in old data and to look if it was found and what<br />

follows after its occurrence.<br />

Between 1966 and November 1992 there were only three other periods<br />

when the conditions for the pattern were satisfied. Here are the dates<br />

when those conditions were fulfilled:<br />

January 25,26,27,28 1966<br />

This paper studies a pattern which had preceded the most important stock<br />

market tops of the past several decades.<br />

Market tops tend to be more diffuse than market bottoms, often occurring<br />

at different times for different indexes, the search for an effective tool to<br />

identify major market tops has been elusive.<br />

October 17,18,21,22,24,25 1968<br />

December 6,7,8,11 1972<br />

AUGUST <strong>2014</strong> ATMASPHERE | 21

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