Relative Strength Patterns

by Isaac Israel

After having studied many thousands of charts, I believe that the Relative Strength of a sector with respect to various market averages reveals hidden momentum and accumulation/distribution characteristics in the market. These patterns of Relative Strength can predict not only various market events, but even their percentage movements in the future. In particular, this implies that the Black-Sholes formula must be improved to take into account the probable market direction. With this motivation, I am in the process of conducting a detailed study that will demonstrate beyond any doubt that the so-called efficient market hypothesis is wrong, and that prices do have memory.

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