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How to read the American Stock Exchange Indicator?
When interpreting the chart above, you need to remember
that the most important factor is the relationship between Index
Price and the Volume Moving Average (VMA).
Here we see that the index has been trading down for almost 2 days,
and at the end of those two days the VMA begins to increase
substantially. This sharp increase signals that a bottom has been
reached and that professional investors are buying. Once the VMA has
peaked, that signals the safest point in which to make a trading
decision, as it is here that the index has confirmed a new upwards
trend.
Below is an example of how one of our exclusive
institutional investors used this signal for
the index to maximize profits by
trading some of the derivatives of the AMEX index:
Details of the above trades, and the derivatives used for this index, can be found in the detailed overview and in the member's section of our site.
By trading index securities using our volume indicators instead of stocks, you gain stability and predictability that stocks do not have. An index is a far more logical in it's actions than the individual stocks it's based upon.
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