[malaguti]

I'm assuming that you are referring to point 3 on page 25 where he talks about the Mansfield Charts? This refers to the MA on the price on the charts in the book and not the relative performance MA which we are discussing, as the Mansfield charting service that he used for the books examples had a 30 week weighted MA on the weekly price bars, but his preference is for a 30 week simple MA and is what is used these days on the Global Trend Alert charts.

So back to what MA should be used to calculate the zero line on the relative performance indicator. A 52 week simple MA should be used according to the calculation I got from chartmill's documentation, and is what I've used for all charts on the forum and is very effective.

The second part of your question was about what market to compare against. You can compare against any market you choose to, but I favour the S&P 500 because it's the main US market and the benchmark that most like to compare against including Weinstein. I believe when the book was made that the Mansfield Relative Strength was compared against the Dow 30 at the time, but these days the S&P 500 is favoured as the benchmark.

The other reason I use the S&P 500 to compare against is that I needed a universal reading so that I could instantly compare the strength of any stock, commodities, index etc to each other as I cover stocks from all over the world on here and create the relative performance tables and so a universal benchmark is necessary for consistency and help with any confusion. As if you only compare to your local market then you can't gauge the relative strength versus other markets without additional work.

The other reason is that I think we should all speak the same language on here, as after thousands of charts examples using the S&P 500 as the benchmark, I've found that when a stock breaks out into Stage 2A, the RS generally crosses over or is already above the zero line (relative performance 52 week MA versus the S&P 500). So I'd recommend using the S&P 500 as the benchmark because of that and the universal readings to compare against all the other charts on here, but if you do choose to use a local benchmark like the FTSE100, then just be clear when you are talking about it in your posts, so that there's not any confusion for any of the members that don't realise that's it's comparing to a different index to all the other charts on here.

I hope that makes sense.

Cheers

I was referring to page 110 "where the Mansfield chart plots relative strength; they use a complex (proprietary page 109) weighted formula". It does say the results are the same, but in some cases they could be a little different as I mentioned. Either way, I guess its taking things to an extreme for me to be that precise. I want the RS to be showing more strength, and for anglo american, it needs more. If all other factors were good as he says..

As for the RS against which market, he mentions the DJI on the majority of occasions but I just put that down to the stocks he was demonstrating..he also mentions it could have been the S&P in one example so I honestly interpreted that as the market to which that instrument is in. Unfortunately when he mentions apple, he doesn't specifically mention what his relative is..I just would have assumed the nasdaq.

However it dispels doubt to use a single reference such as the S&P..I can certainly understand that, but gives a slightly different bias as in the case of Anglo.
we start with a market for bias towards a direction, then use an RS of a different market. Anyway look, I'm not trying to argue
I'll see if I can replicate his historical charts which may be difficult given the number of years back and see if I can understand more and let you know if anything crops up.
apologies to go off on a tangent..lets see how Anglo gets on anyway, whatever its relative performance is