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HSLP   Indicator

 

HSLP, our proprietary HSL (Market) Predictor, was created in 1960 (before HSL was born) in Cannes, on la Riviera. It worked, but I had so many indicators (1000, all done by hand by staff—precomputers), I couldn't decide which to follow. So it lay in an attic for a long time until I dusted it off a few years ago and gave it centre stage.

There are two HSLPs: HSLP-NYSE (for the New York Stock Exchange Composite Index) and HSLP-Nasdaq (for the Nasdaq Composite Index).

To avoid boredom and staleness, every millennium or so we change the name of our in-house market predictor. Previously it was RMA (Real Market Action), but it was changed in October 1999 to HSLP ...until 2999.

HSLP is a qualitative, not a quantitative indicator. A directional indicator, not a timing indicator. That means that if HSLP signals underlying strength in the stock market, while odds greatly favour a new high being recorded before any significant correction or downtrend takes place, it doesn't tell us how much of a new high there will be or precisely when that new high will occur.

Let's look at a couple of real-life examples. As reported in HSL: "...On July 6, 1999, HSLP-NYSE gave an initial signal of underlying weakness in the NYSE Composite Index by turning down without confirming the new July 2 NYSE record high (see pt A on chart). The NYSE registered 4 more new highs in the next 8 trading daysnone of which were confirmed by HSLP.

Finally, on July 19, HSLP turned down sharply (see pt B) creating a clear double bearish divergence with the NYSE Composite Index..."


From the May 16, 1999 HSL:

"...The May 13 high in the Nasdaq Composite (see pt A on chart) failed to exceed the late April high (pt B). But HSLP-Nasdaq is whispering "sweet somethings" in our ear & it's good news for technology investors.

On May 12 (pt C), HSLP-Nasdaq made a new high. So we have a bullish divergence between HSLP-Nasdaq & the Nasdaq Composite Index. The bullish divergence tells us there's underlying market strength that price is presently hiding from investors.  Every bullish divergence HSLP has given has pointed us in the right direction. Time will tell if the Nasdaq Composite goes on to a new record high. But isn't it nice that HSLP is telling us that now?!..."The HSLP's aren't always "talking." But when they do, I (and subscribers) have discovered it really pays to listen!

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