Guide to MARKET CLUES Stochastic Charts

The charts which show our version of "trend-adjusted" stochastics feature a modified stochastic indicator in the bottom plot.

Above is an example chart.

If you're familiar with the standard stochastic indicator, you know that it consists of "fast" and "slow" lines. In our charts, the fast line is shown in yellow and the slow line in magenta. When the fast line is above the slow line, the indicator is on a BUY signal; when the fast line is below the slow line, the indicator is on a SELL signal.

To aid in determining when those signals were given, a solid bar which alternates between yellow and magenta is shown. The yellow parts correspond to periods when the indicator was on buy signals; the magenta parts correspond to sell signals.

The lower right part of the chart will say something like, "BUY +9.2". That will indicate in English whether the indicator is currently (as of the time the chart was created) on a BUY or a SELL signal. The number indicates the difference between the fast and the slow lines. If it's on a buy signal, the number will always be positive; if a sell signal, the number is always negative.