Market Pendulum Model Summary

The Inspiration for the Market Pendulum Model

"In 1581, Galileo, while attending services at the Cathedral of Pisa, observed a chandelier swinging back and forth. Energized by shifting air currents, the chandelier moved in a variety of arcs and amplitudes. Thus was born the concept of the pendulum which Galileo used as a time measurement device in his later experiments." 

Today, Market Pendulum measures the swings in the market, their amplitude, force and energy while recording the motion of emotion across an equilibrium point or gravity center. The concept of gravity center is a central feature of Market Pendulum and is found throughout nature. This is the force of nature that compels both human behavior and physical objects to find their equilibrium point.

What is the Market Pendulum Model?

Pendulum is not really a "model" but a unique trading plan that provides a set of unique, original and world class technical metrics designed to add premiere positions to any trading portfolio when low risk entry points occur as defined by our leading indicators. 

We trade based on primary time frame trends (daily, weekly and monthly) and their configuration. A brief description can be reviewed here.

Trends are first measured by the Trend Directional Indicator (TDI) and Gravity Center (GC). They must both confirm, to call a new trend in any time frame.

What is the Trend Directional Indicator?

Pendulum's trend directional indicator (TDI) along with its signal line (TSL) is based on a proprietary mathematical formula that uncovers a trend and then measures its amplitude, force and energy.  

Regrettably, this original formula was lost (a portion of which is here - (5 * (MAXH8 + MINL8 + C) + 4 * (MAXH8.1 + MINL8.1 + C1) + 3 *) but was then reconstructed to match the original results in a more simplified manner.

What is the Gravity Center Trend Formula?

Gravity Center is an simple but unique formula that recognizes the intricate and delicate balance of recent highs and lows and then integrates them into today’s close based on an equilibrium point or gravity center. That point is constantly changing but is a prime determinant of the overall trend. Prices do not stray too far from this gravity center point and eventually return to it. Mathematicians would call this a "mean reversion".

In effect, Gravity Center is a trend all by itself and a metric that finds the equilibrium point. 

In brief, both of these trend formulas work in unison to capture buy/sell patterns in a format that extracts a trend focus. They can be used to track any stock, index or commodity in any time frame without any adjustment.

What chart displays do we use? 

TC2000 is the chart software we use for all trading decisions. Discounts are available.

An interesting and useful trading tool in that program is the Japanese Heiken-Ashi chart display which, in their language, means “average pace”. In my view, it is an improvement over Japanese candlestick charting because it relates prior price action to the current price, reveals the real trend in trending stocks and indicates turning points more readily.

Heiken-Ashi is most useful in trending stocks. See the chart below

What other unique indicators do we use?

The Pendulum system also includes a set of proprietary and powerful Signature Trend indicators for fine tuning as well as confirmation.

Straight line trading guidance is provided by Pivot Point Precision as described here.

The Directional Momentum Oscillator (DMO) is a directional momentum confirmation indicator best used with the Heiken-Ashi methodology noted above.

Not all charts are as neat, clean and tidy as this but nevertheless the DMO indicator is very useful in trending stocks and indexes.

Another indicator we use is the powerful GPS, a trend confirmation indicator that provides superb accuracy and results.
More details are located here. Other primary indicators are the PWR and TDX, all part of the Pathfinder system.

Please remember that all charts and indicators are advisory technical tools only, not a complete trading platform mechanism. Your personal due diligence and consultation with your primary financial adviser is still required.
Trend and Cycle Summary

The golden pendulum formula is a belief that the herd instincts of greed and fear are prevalent, that virtually all extremes return to a natural equilibrium point or gravity center, and Trends and Cycles of these tendencies can be identified and measured.

Studies have shown that 60% of a typical stock price change can be directly attributed to the movement of the overall market. Therefore, it just makes common sense to be on the right side of a market trend. 

In summary, Pendulum's Trend and Cycle chart is one of the most powerful market displays anywhere blending the longer term trend with the short term cycle in one integrated view. These remarkable tools demonstrate the primary trend and the current cycle within that trend and time frame for a significant trading advantage.

General information on the Market Pendulum Model 

Built on many years of research, development and a belief that precision precedes profits, Pendulum is not only uncanny and precise in its signals but uncommonly profitable in its results.

Pendulum is not a get-rich-quick system but a practical, accurate, and technical tool assisting Pendulum's founder in his decision making process. No matter how precise, it is not perfect. There will be errors particularly in sideways markets. 

The overall results uncovers emerging trends with clearly defined charts.

Most investors have three goals...when to buy, when to sell and a reasonable profit. Following Market Pendulum's charts will assist investors in their own due diligence process.

More Market Pendulum Resources

For specifics on the Market Pendulum Trading System including trading methodology, click here. 

Trader Garrett's Library has useful trading techniques and numerous categorized articles of interest.

The SKI Gold Stock Prediction system is a highly recommended precision based service. We are an affiliate.

Our past Pendulum Trader website (from which everyone graduated), includes summaries of the complete Pendulum Trading System and guides. A free abbreviated version, Pathfinder Premiere, is available here.

We invite you to browse this site. 
Should you have further questions, don't hesitate to contact us.

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