c04 JWBT016-Busby September 30, 2008 13:48 Printer: Yet to come
CHAPTER 4 Commonsense Market Indicators
“
T
here are lies, damned lies, and statistics.” Mark Twain apparently
had little regard for the power of mathematical analysis and numer-
ical gauges. In this computer age, it is possible to statistically an-
alyze just about everything relatively quickly. Twain would no doubt be
amazed to see all of the information that one is able to obtain with just
a click of a computer mouse. There is a chart, curve, diagram, or some
other computer-generated graphic for everything. Market analysts track all
sorts of numbers and data. There is so much information available that one
can easily become overwhelmed. One chart says to buy and another says to
sell. One identifies a top and another one points to a continuing trend. Even
with so much available, it is difficult to identify indicators that sort through
the noise and present helpful information. If one is looking at too many
numbers and figures, it is not difficult to become confused. Confusion gen-
erates paralysis. It is impossible to know what to do. Like swimming in a
sea of swells, it is easy to become overwhelmed and sink in the ocean of
data.
For that reason, I have identified some specific indicators that I con-
tinuously monitor. In conjunction with time and key numbers, I use these
indicators to find my way through the labyrinth of Wall Street. Experience
has taught me that if I keep my eye on these indicators, I am able to put
the odds of success in my favor. The first indicators that I monitor are the
futures indexes. Specifically, I track seven of these and refer to them as the
Seven Sisters. They are the S&P 50-mini futures, Nasdaq 100 futures, Dow
30 futures, Dax futures, gold and oil futures, and bond futures. I generally
track the mini contracts on each of these.