A "Rule of the Majority" (RM) signal occurs when one of the three main U.S stock indices; S&P 500 (SPX), Dow Jones Industrial Average (DJI), Nasdaq Composite (IXIC) makes a new high or low unaccompanied by the other two indices.
The signals occur at major, intermediate and sometime short-term market turns.
Because of the difused nature of stock market tops, RM signals are more likely to occur at stock market peaks as opposed to bottoms.
I first observed the RM phenomenon after the major U.S stock market top in early 2000.
This post illustrates an efective signal at the all-time high for U.S stocks - late 2021 and early 2022.
The IXIC topped first on 11/22/21.
SPX topped on 01/04/22.
When the DJI made a solo new high on 01/05/22 it was an effective RM signal.
The IXIC had on RM signal on 03/14/22 with its solo new low.
The signals occur at major, intermediate and sometime short-term market turns.
Because of the difused nature of stock market tops, RM signals are more likely to occur at stock market peaks as opposed to bottoms.
I first observed the RM phenomenon after the major U.S stock market top in early 2000.
This post illustrates an efective signal at the all-time high for U.S stocks - late 2021 and early 2022.
The IXIC topped first on 11/22/21.
SPX topped on 01/04/22.
When the DJI made a solo new high on 01/05/22 it was an effective RM signal.
The IXIC had on RM signal on 03/14/22 with its solo new low.