EdgeWare FastGraph Version 3 - Manual (Page 40)

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This is a very busy screen. The top half of the screen has the NAV of the index and a
moving average line. The bottom half of the screen contains information about the domi-
nant cycles, and finally, the upper right part of the screen has the spectrum of a specific
day.
Starting with the lower half of the screen there is a solid line (red) that starts at 50 on the
left of the screen and cycles between 8 and 50 as it moves from left to right. This line is
the period of the dominant cycle period. When the line is at or near 50 the NAV (the
OTC-C in this case) is considered to be in a trend mode. The value of this period is used
to calculate the trend line (green) in the upper half of the chart. The trend line is a simple
moving average using this dominant period. Notice that as we move toward the right in
time, the dominate period drops toward 20 days and you can see the moving average in
the upper part of the chart respond by moving much closer to the NAV line (red). When
the NAV line crosses below the trend line this is considered a sell. The NAV continues
below the trend line into the center of the chart with the dominant period falling between
20 and 40 days. Near the center of the chart, in time, the dominant period again goes to
50 days. The MEM is now saying that the index is in trending mode, but it is a down-
ward trend. The dominant period starts to move toward 50 days and the NAV jumps
above the trend line. Note: Using the criteria outlined in Ehlers’s book, a fund would
not be purchased until it had traded above the trendline for one-half the dominant pe-
riod. We have found this to introduce too long a delay. For mutual funds a better buy