The Launch Pad Indicator, utilizes the tendency of stocks that have dropped below the center-line of a moving average, to snap back to the center-line and then exceed that center-line by approximately the same magnitude as the prior drop. This is referred to as, reversion to mean. You can see clear evidence for mean reversions in all stocks, equities and publicly traded financial instruments. Launch Pad, makes the visualization of these opportunities obvious. Stocks already in a long term up-trend offer the best targets of opportunity. This make them desirable stocks to enter and because this pullback now provides a new, more favorable entry opportunity, the pent-up demand to own this stock, combined with this new entry opportunity, often pushes these stock much higher than your entry price. Your average short-term profit expectations for this signal is a move above the zero line that is proportionally equal to the prior move below the zero line or two times the equitie's most recent low below the center line. Launch Pad alerts traders to these frequent and profitable reversion/divergent opportunities, allowing us to visualize, quantify and then capitalize on these obvious and unmistakable signals.
Launch Pad provides you with a visual conformation of the forces associated with the downward pressure exerted on the stock, moving it below the moving average as well as it’s reversion potential that the stock’s price action has produced. The positive potential is at least equal to the negative deviation from the moving average. This same indicator also clearly indicates exactly when the stocks price swings past it’s normal state, i.e., the moving average represented by the zero line. This produces an immediate indication of when the reversal of price has occurred and clear entry signals.