Sunday, March 27, 2011

Cycles vs TTheory Money Flow

You will find the TTheory site in the my list of sites.  Parker Binion has recently written a series of articles about Money Flow as it relates to TTheory.  This week he presented a chart projecting a high in late May early June.....  After an exchange with Parker here is my understanding of this.  Where you get a divergence between Money Flow (down) and price (up) as shown by the red diagonal lines you look for a pivot and this pivot will mark a Middle point.   Looking at the black horizonal lines (left to right) you have the low point, middle point and high point.  The high point is projected for late May (early June).  At least this is my understanding after an exchange with Parker.  Reference the TTheory site for Parker's version of this chart.

Based on my work and projections - this seemed to be just the opposite of my expectations.  So I reproduced Parker's charts and added my own annotations.  Here is that chart:

It is going to be interesting to see which proves to be right - TTheory Money Flow or standard cycle analysis.   We have come to exact opposite conclusions.  Time will tell.  I think it is important to bring you opposing opinions when they are well founded so you have as much data as possible to supplement your own analysis.

GL traders.

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