The DeMark indicators are fairly complex and can seem a little like "black magic" sometimes. No matter what you might think of their usefulness or their predictive behavior, I'm beginning to wonder if some analysts use them to time their upgrades or downgrades.
Take Cisco (CSCO) as an example. Yesterday, CSCO completed a perfected TD Sequential countdown and was immediately followed by an upgrade from Citigroup.
Citigroup analyst Paul Mansky upgraded the San Jose, Calif., networking-equipment maker to buy from hold, calling Cisco attractive for long-term investors based on its valuation.
I have not made any attempt to document this behavior, but I'm certainly going make more of an effort in the future. What I would really like to do is to go back and look at the historical upgrades for a group of stocks and see how they correlate with the TD Sequential and TD Combo indicators. Unfortunately, I do not have the time or resources to attempt such a study. Too bad, if it is true, it could be a significant trading edge.