Trend as persistence, not a straight line

Persistence includes a flat hold

Common chart practice reduces trend to an upward or downward line and often omits a horizontal line as a description of persistence. Trend here means persistence of price over time, including a stable horizontal level, not only an upward or downward slope.

Day-to-day price continuity is presented as more typical of large or administered markets than of markets that regularly jump from one level to another. Local dependence, each print arriving near the last, does not by itself require that persistence be modeled as a straight line.

A trendline is a straight chart line used to state direction or a sideways hold. It is a visual hypothesis about path rather than a complete description of how prices actually travel.

A walk-back fit can fail

A linear-regression procedure can fit the most recent 20 days, then step one observation farther back at a time and treat a decline in the coefficient of determination as a sign that the added price is inconsistent with the current trend.

That regression view counts a persistent flat level as a trend just as it counts rising or falling prices. Movement can be defined as a departure from the fitted line or a sharp change in the line's slope or length.

Filter scale and a line that is not redrawn

A 6% percentage filter on the S&P 500 is used to erase smaller swings and thereby define only moves of that size or larger as the operative trends. The swing size a filter keeps also sets effective horizon: seeking a 6% wave implies ignoring 1% to 2% swings and working on a different scale from 10% to 25% swing definitions.

Moving averages are described as a non-discretionary extension of straight-line trend thinking because they follow price without requiring the analyst to redraw the line.