Is the Market Run getting "Low on the Tooth"? (Python)
Data sourced with Yahoo! Finance
The phrase “Low on the Tooth” is great metaphor for an aging trend and possible trend reversal. It refers to the teeth of aging horses when the gum line recedes consequently making the teeth look longer. 🐴🦷
In the context of trading, we can use it as a label for a scenario when trends are aging and there is a setup for a possible trend reversals. And I just have the right indicator for that!
This story is solely for general information purposes, and should not be relied upon for trading recommendations or financial advice. Source code and information is provided for educational purposes only, and should not be relied upon to make an investment decision. Please review my full cautionary guidance before continuing
The “Run Getting Low on the Tooth” Indicator
The idea for this indicator came from this TradingView indicator by Tradestation. It uses a Simple Moving Average (SMA) of a configurable length to count the ‘up’ and ‘down’ streaks (increases or decreases) of a market index or security in a row. These counts are plotted in bar chart format, so the longer the consequent streaks are getting the longer the ‘bar teeth’ are getting.
Instead of the SMA, you can use other Moving Averages for this indicator, such as:
Exponential Moving Average (EMA)
Weighted Moving Average (WMA) or
Volume Weighted Moving Average (VWMA).