MACD and the Four Stages of the Market Cycle
As a final note regarding the MACD, we might observe that its patterns, which are relatively smooth compared to most market indicators, provide suggestions relating to the four stages of market cycles. Chart 8.22 illustrates the related concepts.
Chart 8.22. New York Stock Exchange Index: 2002 MACD and the Four Stages of the Market Cycle
The smooth patterns of the MACD frequently provide clear indications of the four stages of the market cycle.
As we know, the accumulation of long positions takes place generally during the latter half of Stage 1 or at the onset of Stage 2. Positions ...
Get Technical Analysis: Power Tools for Active Investors now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
