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Tuesday, November 29, 2011

What are the technical indicators/studies most commonly used by institutional investors and hedge fund managers to forecast the stock market (S&P 500)

I have noticed an emergence in cloud charting techniques (also referred to as Ichimoku Clouds) to determine buy/sell signals. It is useful in looking at indices especially since it will give you a good indication of weather you should be short or long the market. However it is important to note that this is a lagging indicator, so you won't be pumping out massive returns "predicting" the next move in the market. But in a choppy, non-trending market this type of indicator is very useful.

Aside from that, as John mentioned, there are many types of indicators you can use. My advice it to find the one's you feel comfortable with and use them to your advantage. If you try to use "all" (or more than one is capable of managing) of the indicators at once, you are going to become overwhelmed, and you will probably get many contradictory signals.

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