Difference between Moving Average Trend Analysis (Inflation Adjusted) chart and Moving Average Trend Analysis (Inflation Adjusted) (TECH) chart
On the Market Scoring Report shows the difference between Moving Average Trend Analysis (Inflation Adjusted) chart and Moving Average Trend Analysis (Inflation Adjusted) (TECH) chart.
Of all the charts and tables we use in calculating local market ‘scores’ – this is the most important chart of all.
We use it for two completely different calculations/algorithms:
1) To determine that market’s appreciation or profitability levels.
2) To determine that market’s “technicals” or “momentum.” (This is the chart labelled “TECH”)
A market could have very strong momentum/TECHnicals simply by being ‘less bad’ each period.
It’s important to know when a market is exhibiting strong upward momentum even if it is showing negative appreciation. For example, if a market DECLINED 20% a year ago, 15% three quarters ago, 10% two quarters ago, and 5% last quarter, it has a very strong upward momentum, even though it is still DECLINING on an inflation adjusted basis. That market would show an increasing amount of STAR icons turning from red/yellow to green.
Separate from a market’s momentum is its actual performance levels. In the example above, the market was still declining (not appreciation) even though it had strong momentum/TECHnicals. So we use the same chart and apply a different set of algorithms to ‘score’ its actual performance/appreciation.
Using the same example, that market would show a ‘weak’ slider ball score for ‘performance’ but a ‘strong’ slider ball score for ‘momentum.’