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Info-Impact Market Perspective
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Market Monitoring Approach
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- Market Perspective -
Price movement of stocks and by extension, data point movement of market performance indicators reflect the strength and weakness of support being provided by market participants. When support strengthens price tends to move up, when support weakens price tends to move down and when support remains stable price tends to move sideways. As information from financial data releases and other business news enters the marketplace, market participants’ actions and assertions can change with changes impacting support... Info-Impact.
The actions being taken and the assertions being expressed by market participants stem from information processing. Information processing by market participants begins with information being acquired and ends with information being created. Most of the financial information acquired and processed by market participants enters the marketplace in data cycles and include, regular financial data releases from government, industry and academia as well as schedule releases of public companies. Calendar quarters delineate one complete data cycle, each month within the quarter delineates a data sub-cycle and each week a data micro-cycle.
Information is created when the actions and assertions of market participants based on their individual information processing skills are detected or become known. Of particular significance to market support, once known or detected, is the information created by the actions being taken by what are perceived to be astute market investors and the assertions being expressed by legitimate market influencers. This is the information that stimulates fear and greed in market investors around the world from institutional to the individual investor.
- Broad Market Support -
At a point, the information coming from the actions being taken by market investors and the assertions being expressed by market influencers will reach critical mass with respect to having either a positive or a negative impact on broad market support, Info-Impact effect at work. When that point is reached, it is an indication that broad market support has transitioned from a more or less positive phase to a more or less negative phase or vice versa, as the case may be. From our Info-Impact market monitoring perspective, there are five stages of support within a broad market support phase with which to follow support strength and weakness (Rather Positive, Somewhat Positive, Rather Mixed, Somewhat Negative and Rather Negative).
In contrast to price trends with multiple trends in place at the same time (e.g., long, intermediate, near term), there is only one broad market support phase in place at a time. Similar to price trends, individual broad market support phases do vary in their duration and magnitude.
- Broad Market Support Monitoring -
Our approach to broad market support monitoring begins with the composite analysis of market participants’ actions and assertions correlated to data sub-cycles (monthly findings). We believe a broad market support monitoring approach correlated to data micro-cycles (weekly findings) forms a monitoring perspective to close to the market and if correlated to data cycles (quarterly findings), forms a monitoring perspective to far from the market.
By design, our composite analysis process is focused on providing a better understanding of support being provided by market participants relating to the present rather than forecasting the future. The process provides a better understanding of current support by 1) using a consistent method to establish the level of support being reflected from our perspective on a regular basis, 2) furnishing a uniform way to follow from our perspective support strength and weakness as information from financial data releases and other business news enters the marketplace and 3) identifying broad market support phase transition points.
> Process Development
In the development of the composite analysis process certain limitations and other issues associated with fundamental and technical analysis methods widely used by market participants were addressed. While the specific process is proprietary, following are the major limitations and issues identified.
The value of fundamental analysis is subject to timely, relevant and accurate data as well as the analytical skills and biases of the analyst. Technical analysis methods that have a time frame as part of their analytical procedure that is set either arbitrarily by a technician or that uses some accepted standard rather than letting the market set the time frame are, in our opinion, of limited value (e.g., moving averages, relative strength indicators).
On the one hand, the point-and-figure procedure of treating all prices as a continuous stream of data ignoring time altogether is a plus. On the other hand, arbitrarily setting the box size is a minus. Charts provide excellent visual pictures of past price and volume activity. However, the lack of consistency attributed to the discretional interpretation of patterns formed by price movement and subjectively drawn lines between price points makes the value of charting for other purposes questionable.
> Process Findings and Value
Findings from our proprietary composite analysis process consist of Info-Impact Factor™, Info-Impact Support Baselines™ and Info-Impact Transition Points™. The findings wil not only add a consistent and informative perspective to your market monitoring process but one that is independent, unbiased and can be easily followed on a regular basis convenient to your schedule.
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