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MCO return to 0. ? for diogenese, fib, other breadth experts


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#21 ogm

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Posted 29 August 2013 - 06:16 PM

So you're absolutely sure that the 5% component is associated with the 19 day EMA and that when either the 5% or 10% component is above or below their zero lines it's associated with where the A/D line is in relation to these same EMA's??

And if you wish to continue to be stubborn on this subject matter as to maybe learning something important that could help your own analysis in the future, is there ANYONE out there who would really like to know exactly what these components represent once and for all??

Fib



Fib, you serious ? Please, Stop embarrassing yourself. If you want to sell a service interpreting some indicators, at least understand how they are calculated.

5% components IS the 19 EMA. and 10% component IS the 39 EMA. The original calculation by applying a smoothing constant, as opposed to the exponentially weighted calculation that is being used in standard charting software.( but pretty darn close analogy )

This is the original method for calculating the exponential moving average.

Here, from http://www.mcoscilla...lan_Oscillator/ You could've bothered to at least read that one.

" The McClellan Oscillator and Summation Index were developed by my parents back in 1969. Calculation of these indicators starts with the daily A-D difference, as you have probably already discerned. Two different exponential moving averages, the 10% Trend and the 5% Trend, are calculated to smooth the daily A-D data, and the McClellan Oscillator is the numerical difference between these two moving averages. The Summation Index is the total of all previous McClellan Oscillator values, and it is neutral at +1000 when calculated and calibrated properly.

Excel does contain an "exponential smoothing" routine in its Data Analysis set (see its Tools menu), and the description shows it to the same thing as an exponential moving average as most technical analysts would define the term. But one need not go through the complex indicator menus in Excel to construct these indicators.

The 10% or 5% figure refers to the smoothing constant of the moving average. The best way to think of it is that for the 10% Trend (for example), the new value for today's 10% Trend would be moved from yesterday's value by an amount equal to 10% of the difference between today's price (or A-D difference) and yesterday's 10% Trend value. Stated algebraically, it reads:

10%T(today) = 10%T(yesterday) + 0.1x[Price(today) - 10%T(yesterday)]

This can be further reduced to read:

10%T(today) = 0.9 x 10%T(yesterday) + 0.1 x Price(today)

The same calculation would work for a 5% Trend except that you would use 0.95 and 0.05. The reference to a set number of days (e.g. 19 or 39) refers to a formula which states that the smoothing constant can be chosen to correspond to a certain period by using the formula 2/(n+1), where n is the number of days. Thus a 19-day period would calculate out to:

2/(19+1), or 2/20, or 1/10, which is really 10%. "


And here is is in an easy to understand chart form ...

Posted Image

#22 ogm

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Posted 29 August 2013 - 06:28 PM

Posted Image

Edited by ogm, 29 August 2013 - 06:29 PM.


#23 diogenes227

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Posted 29 August 2013 - 06:33 PM

I suppose since my name is sort of in the title of this thread I probably ought to chime in here. As to the details, I'll defer to Fib's and Ogm's on-going...shall we call it "banter." :) I can't think of two other posters here who have more to say about bullishness and bearishness, pretty much respectively, and I very much appreciate both of them. As for me, I constantly try to "simplify, simplify, simplify." It's hard enough to keep for me to keep my head on straight without things getting to complicated, especially when things are not instantly going my way. So...so all I look at in relation to the MCO is the NYMO and the NYSI. While I may take an occasional glance at the NAMO and NASI, my index trading is almost exclusively underscored by movements on the NYMO and NYSI. My short term trades, usually leveraged ETFs, are taken on the NYMO, and my longer-term trades, usually stocks, are taken according to the NYSI's direction. I probably should but I don't care where the five and 10 percent components are. Too complicated for me. :huh: The great thing about the NYMO high below highs (like in July) and the lows above lows (now, since 8/22)) is they usually give advance warnings for turns in the market. For me, the lows above lows are more telling in bull markets, and the highs below highs in bear markets. But trading them can be treacherous, which is why I have often called the low above above a low on the NYMO an aggressive trader's buy (they can only be taken with protective stops). For instance, almost everything today is below that 8/22 low above a low. But the TQQQ and TNA I bought on today's open are both up (3 percent on TNA, 2 percent on TQQQ) now with breakeven stops. The great thing about the NYSI is it is market context. Bullish stocks sometimes run up on their own but with a rising NYSI at their back they run like crazy. I was going to point to TSLA again as an example but for variety's sake take a look at YELP or FB on the NYSI's last rise. When the NYSI is declining bearish stocks fall like rocks, like XOM or UAL or the housing stocks. I have a buddy who holds 20 big blue chips at all times. I ran his stocks the other day to see how they were doing since the NYSI turned down on July 29th. One was flat, one was up (MSFT, on the news Balmer's passing), and the other 18 were all down, a couple as much as 10 percent. This is the power of breadth. So where are we now as far as I can see? I'm partially long, betting the lows above lows on the NYMO can follow through to turn NYSI up and produce for a rally that can run for a month or six weeks or so. But I can see the NYSI is still going down so the bears still have the ball and so I have tight stops just in case I'm wrong. Good luck and good trading.

Edited by diogenes227, 29 August 2013 - 06:37 PM.

"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

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#24 ogm

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Posted 29 August 2013 - 06:45 PM

I'll add one more chart, like Diogenes says. Keeping it simple.

And in light blue... the secret of "escape velocity" revealed ;)


Posted Image

Edited by ogm, 29 August 2013 - 06:46 PM.


#25 fib_1618

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Posted 29 August 2013 - 08:10 PM

So you're absolutely sure that the 5% component is associated with the 19 day EMA and that when either the 5% or 10% component is above or below their zero lines it's associated with where the A/D line is in relation to these same EMA's??

And if you wish to continue to be stubborn on this subject matter as to maybe learning something important that could help your own analysis in the future, is there ANYONE out there who would really like to know exactly what these components represent once and for all??

Fib, you serious ? Please, Stop embarrassing yourself. If you want to sell a service interpreting some indicators, at least understand how they are calculated.

5% components IS the 19 EMA. and 10% component IS the 39 EMA. The original calculation by applying a smoothing constant, as opposed to the exponentially weighted calculation that is being used in standard charting software but pretty darn close analogy)

OK...you've had your chance.

Since you like to use the McClellan's as a proxy, how about if YOU take the time to educate yourself with the essay linked below on EMA's and how modern technical analysis got it start.

For everyone else, this is a great piece that should be reviewed at your leisure...serious technicians need only apply.

Oh...when you decide to get off your high horse, and you want to understand what you're looking at without guess work, my door is always open...at no charge.

For everyone else, you're welcome and have a great holiday weekend!

Fib

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#26 xe2dy

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Posted 29 August 2013 - 08:18 PM

This type of thread is what makes this board a must read every day! Thanks to all.

#27 K Wave

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Posted 29 August 2013 - 09:32 PM

5% components IS the 19 EMA. and 10% component IS the 39 EMA. The original calculation by applying a smoothing constant, as opposed to the exponentially weighted calculation that is being used in standard charting software.( but pretty darn close analogy )

This is the original method for calculating the exponential moving average.

The 10% or 5% figure refers to the smoothing constant of the moving average. The best way to think of it is that for the 10% Trend (for example), the new value for today's 10% Trend would be moved from yesterday's value by an amount equal to 10% of the difference between today's price (or A-D difference) and yesterday's 10% Trend value. Stated algebraically, it reads:

10%T(today) = 10%T(yesterday) + 0.1x[Price(today) - 10%T(yesterday)]

This can be further reduced to read:

10%T(today) = 0.9 x 10%T(yesterday) + 0.1 x Price(today)

The same calculation would work for a 5% Trend except that you would use 0.95 and 0.05. The reference to a set number of days (e.g. 19 or 39) refers to a formula which states that the smoothing constant can be chosen to correspond to a certain period by using the formula 2/(n+1), where n is the number of days. Thus a 19-day period would calculate out to:

2/(19+1), or 2/20, or 1/10, which is really 10%. "


And here is is in an easy to understand chart form ...

Posted Image


When I run those formulas, I get 2/(39+1)=2/40=5%, and 2/(19+1)=2/20=10%.

So just wondering why you have it the other way round...with 10% as 39, and 5% as 19?

The 5% being equivalent to 39 make sense, as a 5% Trend is slower changing than a 10%, and 39 is larger(slower) than 19.

Or did you just make typos on your chart?

#28 gman

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Posted 29 August 2013 - 09:44 PM

5% components IS the 19 EMA. and 10% component IS the 39 EMA.


omg,

The 1% is the 200 day EMA, the 5% is the 39 day EMA and the 10% is the 19 day EMA.

Gman

Edited by gman, 29 August 2013 - 09:45 PM.

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#29 K Wave

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Posted 29 August 2013 - 10:06 PM

Sherman McClellan's Speech


The first sentence of that article brought back some old memories...used to share a green screen Quotron with Fred Meissner in another life... :lol:

Spent more hours than I care to admit watching KWHY 22 and it's cast of characters (da_cheif included)...far better quality stuff than the crap on CNBC nowadays, which I never watch.

Cant believe its been 30+ years already....

#30 thespookyone

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Posted 29 August 2013 - 10:43 PM

Sherman McClellan's Speech


The first sentence of that article brought back some old memories...used to share a green screen Quotron with Fred Meissner in another life... :lol:

Spent more hours than I care to admit watching KWHY 22 and it's cast of characters (da_cheif included)...far better quality stuff than the crap on CNBC nowadays, which I never watch.

Cant believe its been 30+ years already....



Quotron, wow, that brings back some memories-did a bit on one myself, LOL. When I first traded commodities, I was using an FM receiver that picked up quotes off satellites -it was incredibly expensive-like 350 bucks a month-and that only covered like 4 or so live commodity feeds.

And was John Bollinger better to watch back then than the current bunch of clowns?- a "fuzz" :lol:

Edited by thespookyone, 29 August 2013 - 10:47 PM.