8 replies to this topic

[NAV]

http://stockcharts.com/charts/gallery.html?$NYAD

[dcengr]

http://stockcharts.com/charts/gallery.html?$NYAD

I would tend to agree... except what disturbs me is that the drop at end of feb came sort of out of nowhere.. It was a vicious drop, and it was world wide.. it could've been panic, and sure enough it didn't last that long.

Perhaps liquidity problems as shown by NYAD are only predictive of greater than 4% drops from the highs.. or perhaps theres more to the liquidity story than just what NYAD can show.

[NAV]

it could've been panic

That was a panic by various measures, which many tend to disagree with me on this board. I have also stated my reasons. I also said right near the bottom that we would see a move to 1415 and then a retest and this whole drama should be over.

http://www.traders-t...?...c=67385&hl=

Edited by NAV, 03 April 2007 - 02:27 AM.

[wyocowboy]

I have a simple question. What is liquidity and how do you define it?

[fib_1618]

I have a simple question. What is liquidity and how do you define it?

Not such a simple question actually as it fully depends on the mechanism being applied to create such an answer.

In a general sense, "liquidity" represents the ability to buy or sell a product (or service) at a quoted market price.

When it comes to the stock market, the spread between the bid and the ask provides the trader the knowledge of how "liquid" the issue is on both sides of the trade...the narrower the spread between the bid and the ask suggesting a higher level of liquidity (or execution) than that of a wider bid and ask spread.

The NYAD line represents the amount of money that is available for investment - not that it will be specifically invested, or where, or when - only that there is enough money in the "system" (when advancing) to provide that added structural cushion to all of the listed issues being cumulatively measured.

Fib

[wyocowboy]

Thanks, Dave. That is an answer that my simple mind can grasp.

[spielchekr]

Divergences be damned! One of these times, price will be forced to follow $NYAD into the great beyond.

[OEXCHAOS]

Guys, also look at the cumulative A/D VOLUME. This is a BETTER indicator of liquidity. Similarly, it shows the NYSE with at least pretty good liquidity. That said, I'm a bit flummoxed by the Nasdaq Cumulative A/D Volume. It's still negative...for now.

[Data]

NYAD (AD line) also bottomed in March of 2000 and rallied for two years until the market bottomed in July 2002. It doesn't mean a whole lot by itself since indices and sectors draw constituent companies from all three exchanges.