Thenkulam Index

From technical perspective market is said to be strong if demand for stocks rises despite increase in stock price and volume declines as the price slides. The following chart shows the relationship between stock price and volume traded in a strong market

In a weak market the relationship gets reversed, volume increases as price declines and vice versa. The following chart shows relationship between price and volume traded in a weak market


Based on these premises a new technical analysis too is developed to gauge the strength of the market which is ratio of % change in price and % change in volume. In strong market the ratio will be positive and negative otherwise

Fine tuning the tool further the Thenkalam Index looks at relative strength temporally; the derivation is as follows
· X = 1 if the ratio is positive (i.e. the market is strong) and 0 if the ratio is negative
· Thenkalam Index = 20 day MA of X – 40 day MA of X

If the index indicates that the market is stronger when the index rises above zero and weaker when the index is below zero (refer to the chart given above)

The following chart shows the difference between 5 day moving average and 10 day moving average. We can see that the market broadly rallies after a spike in the index

Crude's supposedly demand curves

Despite the significance the chart is flawed since demand curve factors price and quantity, and not time.
I am trying to integrate time into demand and supply curve which will most probably result in cyclical pattern from a '8' shaped loop. The second chart is just part of this step

U to W by Keynes

Keynes & shapes of recession

Just few months ago the world was swamped with images of the Great Depression. Thanks to media, each and every one who had access to 24X7 TV networks knew what a recession (if not depression) as financial analyst / economist took extra effort to showcase there awareness on the Great Depression and recession. The resurgent market and reviving economy has taken everyone by surprise and it seems that Keynes has rescued the global economy once again from depression; 70s saw ‘W’ shaped recovery which possibly could have been another painful ‘U’ shaped recession. The chart shows US's Federal deficit overlaid with shaded areas for NBER's recession. It seems that Keynes apart from changing 'U' to 'W' (shape of recovery) has also lowered the frequency of recessions.