The Hausse indices are indicators of optimism. They show the ratio of investors who are positive in the market.
An analysis of hausse indices is an important part of an overall market analysis. Hausse analysis can show the level of optimism among short term and long term investors, and whether the optimism is rising or falling. In special situations, following long rises or falls, hausse analysis can identify the turning points in the market.
Investtech’s short term hausse index (hausse1) measures optimism among short term investors. The index is a good gauge for the level of activity in the market among investors who tend to keep a stock for one to six weeks. Investtech’s long term hausse index (hausse2) measures optimism among long term investors. It shows mood swings in the market among long term investors who tend to keep the same stock for several months or years.
When a long term reversal in the market is coming, it can often be detected early by watching the actions of short term investors. Therefore an analysis of the short term hausse index is important, not only for short term fluctuations, but also for long term trends and reversals.
The two Trading Range strategies give a buy signal when the price of a stock moves above a previous top and a sell signal when the price moves below a previous bottom, in the short/medium term. Signals from price patterns and trends are considered to be significantly stronger than Trading Range signals, but Trading Range signals can in some cases be triggered sooner.
We can measure optimism in a stock by seeing if investors are still willing to pay more than before for the stock. If this is the case, i.e. that the stock has risen above the previous top, the stock is given a buy signal in the hausse estimate.
If the opposite is true, i.e. investors are willing to sell at lower prices, lower than previous bottoms, the stock is given a sell signal in the hausse estimate.
The Hausse index shows the ratio between number of companies that have triggered buy signals and total number of companies. The index has a value between 0 and 100, where 0 means that every company’s last signal was a sell signal, and 100 means that every company’s last signal was a buy signal. Values above 50 indicate that a majority of investors are positive.
Positive Hausse index:
Negative Hausse index:
Elation:
Dejection:
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The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.
Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer.
The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.