A Simple S&P 500 Trade Signal

• Posted by Greg Harmon
• on February 7th, 2013

Renko Charts are a simple way to decide whether to be long or short a stock or index. These charts take the time element out of the equation so they work well in markets that are not really choppy. These look at movement within a time period (day, week, 5 minutes, whatever) to filter out some of the noise. Using the Average True Range (ATR) as a box size they have some

resemblance to Point and Figure Charts. If the boxes are empty or white then the buy signal confirms and if they are filled then a sell signal comes in. Take a look at the chart for the S&P 500 over the last 6 months using candlesticks. There are a couple of defined trends but also some periods of chop. Now compare that to the Renko chart underneath. A much clearer picture. Even if you are a gunslinging day trader these can add value for you. Take a look at the one month 15 minute charts comparison. Nice tool to have huh. By the way they both point higher.

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Dragonfly Capital Views Performance Through January 2013 Expiry

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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