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As a market indicator, the
MMSignal has a direct, straightforward correlation with the S&P yearly
returns. The chart below has compiled the MMSignal’s yearly average
values and compared them to the percentage annual returns of the S&P 500
for over 55 years (from 1950 to November 4th, 2006).
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The correlation, as the straight
line and the equation show, is strikingly significant. Without a doubt,
this relationship clearly confirms that the MMSignal is a reliable
oversold/overbought indicator for the S&P index. |
