The Pyramid data can be accessed either through the Stock Selection section
or through the End of Day section.
Let's see an example of how the Pyramid works.
DSW is a shoe manufacturer. As you can see in the screen shot below, the Pyramid data includes numerical values, with a color code, as well as the Effective Volume figure.
The color code:
Red is bearish, green is bullish, and white is neutral.
Hence, the rating for each stage of the pyramid is as follows:
Very Bearish: two red dots
Bearish: one red dot
Neutral: two white dots
Bullish: one green dot
Very Bullish: two green dots
From here, you can read the details of each rating, but most importantly, just look at the number of green and red dots.
Many green dots signify that it's okay to buy.
Many red dots mean that it's okay to short.
The Stock Section
1. LER: Large Effective Ratio
LER is measured every day. It is defined as the ratio between LEV (Large Effective Volume, which represents large or mainly institutional investors) and the total volume.
LER is then normalized between -125 (strong distribution) and + 125 (strong accumulation).
LER > 100: two green dots
50 < LER < 100: one green dot
LER < -100: two red dots
-100 < LER < -50: one red dot
2. Supply:
The Supply Indicator is a mathematical model that calculates the probability that a shareholder will sell his or her shares. (See more explanations here:http://www.effectivevolume.com/conte...al-time-system)
The Supply must always be used along with the Active Boundaries. (See the Active Boundaries explanation below.)
Supply > 10% and AB > 50: two red dots.
Supply > 10% and AB < 50: one red dot
Supply < 10% and > 5%: one green dot
Supply < 5%: two green dots
Two red dots are shown when most investors are losing money and are ready to sell in order to cut losses.
3. AB: Active Boundaries
The Active Boundaries measure the Upper and the Lower limit of the average profits of active shareholders. The idea is that active shareholders tend to buy when their average profit reaches a low level and tend to sell when their average profit reaches a high level. These levels are called Upper/Lower boundaries and are reevaluated on a weekly basis. This indicator is excellent at catching trends, and therefore is good for trend-following. (It is described fully in Ch 2 of the "Value in Time" book.)
AB > 80: two green dots
AB > 50 and < 80: one green dot
AB < 20: two red dots
AB > 20 and < 50: one red dot
4. 20D RS: This is the 20-Day relative strength ranking.
The ranking is normalized between 0 and 100. 100 is for the strongest stocks.
A stock with a RS > 90 would receive two green dots
A stock with a 80 < RS < 90 would receive one green dot
A stock with a 10 < RS < 20 would receive one red dot
A stock with a RS < 10 would receive two red dots
The Sector Section
20D RS: This is the 20-Day relative strength ranking.
A sector with a RS > 80 on a bullish mode would receive two green dots
A sector with a RS < 10 on a bearish mode would receive two red dots
The Market Section
In this section, we look at past 3-day and 5-day profits when the 20DMF was in similar conditions.
Profit > 1.5%: Two green dots
Profit > 0% and < 1.5%: One green dot
Profit < -0% and > -1.5%: One red dot
Profit < -1.5%: Two red dots