We also provide timing signals for the 30-Year Bond in the DPA Daily Summary. These signals are the result of our analysis of the movement of the 30-Year Bond Yield. We will normally make brief remarks offering an interpretation of the day's market activity or an explanation of why we made a signal change. Our general belief when writing this section is that we are the sum of our parts and that one part will affect another, and we use this section to present perspectives aimed at helping us all become better integrated. We welcome your comments and questions, and sometimes we will publish the letters we receive and our answers to them.
Confidentiality is maintained unless the writer has specifically authorized otherwise.
I developed this basic structure in 1998 when I noticed that a lot of analysts were supporting their bearish arguments by citing numerous breadth indicators. At the time it was true that market breadth was horrible, but it occurred to me that citing a list of breadth indicators a yard long was presenting an unbalanced view of the market and that a more structured and balanced approach was needed to be sure that all important areas were covered. Most technical market forecasters seem to work with a collection of indicators that they find useful, and I have done this myself for many years, but I slowly began to realize that these indicators actually fall into certain groups that comprise the basic elements we should analyze when trying to assemble an intermediate-term forecast. These elements are not equally weighted, but they each tell us something different about the market, and all should be considered during the forecasting process. Not only will this methodology give us a balanced perspective, it will prevent us from being stampeded by a narrow group of indicators that focus only on one part of one element.