Stock Overshoot beyond Moving Averages, how much is too much?

Some of us rely on fundamentals, some on technicals and some on both. Question always is, how much move in stock market is too much. When can we know it is an excess? Can we quantify the excess? In search of these answers I did a study on US Indices. Lets take the example of S&P: I found that if S&P overshoots its 20 Week Moving Average by 5.15%, that is time to be cautious and if it overshoots its 20 Week Moving Average by 7.5%, then it is too much and one needs to be very cautious. As and when this has happened in history, the index comes down below its Moving Averages or atleast kissses it back for a re-run. On June 15th, 20 week moving average was 7.6% and results of my study was in line with the movement we saw after June 15th. Here is the link to check the outcome for 10 different Indices and Im sure you will find some amazing results in this work Click here to read priliminary report on Stock Price Overshoot beyond its Moving Averages.and here to read on US Index Stock Overshoot beyond Moving Average Study

I have not yet compiled it in simple plain language, which I will do soon. However still it is worth seeing and it helps a great deal in anticipating the next short, mid and long term market move, depending on the average we take. I am testing it on individual stocks and very soon I will try to come out with a simple way to calculate this Overshoot numbers which signifies caution. Your feed back is welcome.

Regards Harman.