60 replies to this topic

[diogenes227]

You abandoning new highs forecast here ? Looks like the bull case is toast for awhile, news pop was all that was, same old game.

It's only a well deserved 2/3 day pause to refresh after a breadth thrust.

I wouldn't be surprised to see new highs by early next week just to scorch the near month put speculators.

Fib

Sure would be fine if it was 3/4 instead of 2/3 with four being the magic number (but four consecutive days down has become a rare event). NYMO turned down the day before yesterday, the NYSI yesterday, so was today any surprise? My nifty-fifty stocks, which rolled over three days ago, have 35 on sells (like to see 40 or more), with ten still overbought against five oversold, which is to say I'd like to see more downside and the more the better to give the bull swing next week more strength (exuberance? ).

Good luck and good trading.

[Market Slayer]

Admin please remove Dev for flagrent attacks. He called for RUT 500 a few years back and vanished.

[diogenes227]

Admin please remove Dev for flagrent attacks. He called for RUT 500 a few years back and vanished.

Oh, come on... Both Dev and Fib are spirited posters and both, as far as I'm concerned, are worth reading, with points of view and methodologies worth discussion. If all disagreement is barred here, this will be a site filled with white space. Read them, consider them, ignore them, use your own judgement but it's free speech so let the talking go on.

[Dex]

In plain English we are computing a one day net positive or negative money flow based on whether a stock closes above or below its’ mid-point for the day, measuring how close to its’ high or low it is at the close, and then relating that to the volume.

So, by this very definition, it is NOT a money flow indicator.

Thank you for your research.

Fib

I wouldn't say that.

Considering the multiple investment - mutual funds, ETFs, derivatives, stocks and the ease that money can be moved around these days - is there really any way to measure ONLY Dollars going into or out of a stock index without using some construct of price and/or volume?

Edited by Dex, 12 June 2014 - 04:47 PM.

[fib_1618]

It is another "Averaging Scheme" - doesn't give us any information about PRICE Expectation. WORTHLESS.

Anybody really use this thing?

Well, at least one person does.

But I've been thinking about this, and maybe a better explanation between what the CMF does and what A/D line provides is needed here.

As Dex provided in the formula, the CMF is an indicator that assumes that if prices of an individual price chart, whether it be that of a stock or a basket of related components, rises with increasing volume, it can only do so if there is a higher amounts of money moving into the issue than going out of it. Alternately, if prices close toward the lower end of the day's range, and volume increases, the opposite is true.

The important thing here to remember though is that any money moving in or out of a specific equity product can only do so based on how large (or deep) the liquidity pool is that's available to draw from where this same "money flow" branch of the larger pool can then move in to or be withdrawn out of this same individual product. So the only true way to absolutely know how much money there is for the stock market - the total liquidity that's available for investment - is best reflected by the number of advancing issues compared with the number of declining issues on any given day and then plotting the cumulative results [breadth leads price (TA 101)].

So provided below is a partial longer term time chart of the NYAD line showing that current liquidity levels are at highs never ever seen since these statistics have been kept...and that would be 1926.

And until this data diverges with price, history suggests that prices will continue to trend higher no matter what you may "feel" to be different.

Fib

https://stockcharts.com/c-sc/sc?s=$NYAD&p=D&st=1991-01-01&en=today&i=p86565626633&a=355131529&r=1402608692032.png

[Dex]

In plain English we are computing a one day net positive or negative money flow based on whether a stock closes above or below its’ mid-point for the day, measuring how close to its’ high or low it is at the close, and then relating that to the volume.

So, by this very definition, it is NOT a money flow indicator.

Thank you for your research.

Fib

I wouldn't say that.

Considering the multiple investment - mutual funds, ETFs, derivatives, stocks and the ease that money can be moved around these days - is there really any way to measure ONLY Dollars going into or out of a stock index without using some construct of price and/or volume?

The only way I can think of doing it is for the exchange to "tag" a purchase as higher or lower then the previous days close and then add them up at the end of the day to get a direction.

[SemiBizz]

Sorry to me that is fuzzy math. Sort of assumes that Price and Volume operate at some kind of constant every day and that forces are equal... No way. Trading markets is like going out to sea, every day is different, the tides, the current, the weather, it's all different. What can be done with price on a given day with a given volume can vary dramatically. This indicator is blasphemous...

[Dex]

So provided below is a partial longer term time chart of the NYAD line showing that current liquidity levels are at highs never ever seen since these statistics have been kept...and that would be 1926.

And until this data diverges with price, history suggests that prices will continue to trend higher no matter what you may "feel" to be different.

Fib

Couldn't it also mean that it is Illiquid - there are few sellers (less stocks available for sale) therefore the few that want to buy have to pay more to find a seller - A-D goes up - not that there is a great deal of money out there chasing stocks?

A liquid market is an efficient market - there are large number of buyers and sellers determining the price. If the ratio of buyers and sellers is out of wack then you get a price change - no buyers; you can not sell, price falls - no sellers; you can not buy, price rise.

Edited by Dex, 12 June 2014 - 05:15 PM.

[fib_1618]

Trading markets is like going out to sea, every day is different, the tides, the current, the weather, it's all different.

I'll use your analogy.

The NYAD line measures the depth of the liquidity pool....sort of like sailing on San Francisco Bay when the tide is in and the tide is out.

The NYUD line (or any volume cumulative line) measures whether the boat on this same pool is able to move forward, stalls, or gets hung up on what's underneath the surface of the pool if this same pool is drained.

Nothing blasphemous about it...breadth leads price. Volume is then needed to move price in the direction in which this same breadth dynamic is moving.

They must, underneath it all, work together to gain a specific goal in relation to price itself.

Fib

[Dex]

Trading markets is like going out to sea, every day is different, the tides, the current, the weather, it's all different.

I'll use your analogy.

Never give Fib an analogy ... he will torture it until it gives up the ghost.

Edited by Dex, 12 June 2014 - 05:25 PM.