Special K

#momentum #longterm #cycle 

Creator: Martin Pring

Martin Pring’s big brother of the KST. It adds together many smoothed rates of change – short-term, medium-term and long-term – into one line that tracks a market’s complete momentum cycle. Pring built it so that its major peaks and troughs tend to arrive close to the real bull and bear turning points in price. Read with a signal line (its own average) or a trendline. 

Default period: Pring’s fixed set of 12 ROCs (from 10 to 530 bars) with weights; 100-period average as signal line 

Rising Special K indicates the full momentum cycle is up. Falling Special K indicates it is down. 

Its major turns often lead or match major price turns. 

Useful readings: 

Special K turns down from a major peak: Primary uptrend maturing, reduce risk 

Special K turns up from a major trough: Primary downtrend ending, prepare to buy 

Special K above its signal line: Momentum cycle bullish 

Special K below its signal line: Momentum cycle bearish 

Special K breaks its own trendline before price does: Early warning of a big turn 

Price at new high but Special K well below its peak: Late-stage bull market, caution 

A positional tool for daily and weekly charts, not for intraday 

Objective rules: 

Bullish: Special K crosses above its signal line. 

Bearish: Special K crosses below its signal line. 

Major turn rule: Special K breaks its drawn trendline AND price breaks its own trendline, act in that direction 

Positional rule: Stay long while Special K holds above its signal line on the weekly chart 

Late-cycle rule: Price at new highs with Special K far below its peak, stop adding fresh longs 

What makes it unique: 

It stacks a dozen smoothed momentum curves into one line whose major turns aim to match the market’s primary peaks and troughs. Pring designed it as a full market-cycle roadmap, not a signal generator. 

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.

 

This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.