January 02, 2007

Many years ago, I did a combined speaking engagement with Steve Todd (The Todd Market Forecast) and Peter Mauthe (who now works for Rhoads Lucca in Dallas), before an AAII group in San Diego.  During the Q&A, someone asked each of us to identify our favorite indicator.
 
Steve Todd had the best answer among the 3 of us, an answer which led me to coin the term, "The Steve Todd Test".  Steve said that he likes a lot of different indicators, but when they get into conflict as they invariably will do, his default position is to examine just a plain old ordinary bar chart, and to pose to that chart this question:

"Is you is, or is you ain't, in an uptrend?"

Steve is from Alabama, so you'll have to mentally apply the deep baritone and southern accent.  He went on to say that the answer is usually pretty much self-evident, and the action resulting from that answer is usually the correct one.

So remember "The Steve Todd Test" the next time you are in doubt about a chart interpretation.   

Tom McClellan
Editor
McClellan Market Report