Stocks Give a Long-Term Buy Signal
Stock prices were down slightly last week. SPDR S&P 500 (NYSE: SPY) lost 0.93%, while PowerShares QQQ (NASDAQ: QQQ), an ETF that tracks the 100 largest Nasdaq stocks, lost 0.04%.
QQQ closed last week with a relatively rare buy signal based on an indicator called KST. This is an indicator developed by Martin Pring, who said it offered a reliable market forecast based on the interaction of the stock market with the business cycle. He called it "Know Sure Thing" because he felt that it was the closest thing to a sure thing he knew of.
Three time frames for this indicator are shown in the chart below, using the parameters Pring offered in his 1985 book, Technical Analysis Explained. The medium and long-term indicators both crossed above their moving averages last week, while the short-term version has been bullish since July.