A Brief Arms Index Primer

Here's a different way of looking at data that may be new to readers who never read one of my early books, The Arms Index. It merely superimposes the two moving averages that comprise the index. In that way, the longer-term moving average becomes the baseline around which the shorter-term moving average oscillates. I have shown two applications, one for investors and one for aggressive traders. Note that in both cases, but on different time frames, one wants to be long when the short term is above the long term, and vice versa.

The message we get from the two charts seems clear and bears out what I have been writing. On the long-term chart, we see that the markets are now in a downward move, and it seems to have a good deal further to go. Therefore, investors should remain very cautious....305 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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