INSTRUCTIONS
1) There are two types of predictions: ratio of price and raw price. For price , follow the predicted price line and compare it to the plot of actual price for market being predicted. When the actual price line falls below the predicted line, this indicates a week buy signal. When the actual price falls below the predicted line, and the predicted line is predicting up, this is a stronger buy signal. The converse is true for sell signals. For ratio predictions, buy signals are indicted on the day when the ratio is predicted to rise above 1.0, and sells are indicated when the ratio is predicted to fall below 1.0. Acceleration of prices and deceleration of prices are associated with changing values in each of these areas, positive and negative. Note that either of these sets of predicitons, alone, are typically insufficient and must be correlated with predictions ofr market internals, noted below.
2) The pattern of the predicted price plot and the actual price plot may be compared. Look for similar patterns that hint at the shape of the future price move. Look for price pattern correlations between the actual price and the predicted price at multiple scales.
3) The relation between historical prices and historical predicted prices is important for using the model. Look for the relationships between the two patterns, and bear in mind that these patterns can be on different scales for both actual and predicted values.
4) If available, compare market predictions for markets that have high correlation, such as SPX and OEX.
5) Use predicted market internals such as AV, DV, AI, DI, VIX and TRIN to see if the current day's price action and internals agree with the likely predicitons.
6) After haveing done your analysis, always buy on weakness and sell on strength: this is not a trend following approach. Always buy the dips and sell the rallies.
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