PMC

Description

The Persons Market Catcher (PMC) is a variation on Relative Strength Comparative Analysis of one market versus the S&P 500 on a percentage change basis. The study uses a moving average component to help identify if there is a trend developing in performance over time. Its zero line histogram component represents a market's relative strength or weakness in four stages: Outperforming, Weakening, Lagging, and Improving.

  • When the histogram bar is above zero and is colored light blue, the market in study may currently be outperforming the S&P 500.
  • When the histogram bar is above zero and is colored dark blue, the market in study may have outperformed the S&P 500 but has since entered the weakening stage.
  • When the histogram bar is below zero and is colored bright red, the market in study may currently be lagging compared to the S&P 500.
  • When the histogram bar is below zero and is colored magenta, the market in study may have been outperformed by the S&P 500 but has since entered the improving stage.

The moving average plot helps identify or confirm that a conditional trend has developed.

The PMC indicator can also be used for indentification of bearish divergence patterns. When a market makes a higher high but the indicator fails to do so, the relative performance may actually be weaker than the overall market's, so future highs are likely to be declining. Once the PMC histogram falls below zero, the market is likely to be bearish.

Plots

Plot

Description

Diff

The PMC Histogram; the difference between rates of changes in the market in study and that of the S&P 500.

DiffMA

The exponential moving average of the Diff value.

ZeroLine

The zero level.

Example*

*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.

  Past performance is no guarantee of future performance.