7 replies to this topic

[airedale88]

INDU making new highs at upper envelope while NYSE 21 day mv.avg. of adv/decl's turns negative generates a sell signal for this system. it indicates a move to the lower 3% to 4% band. (chart shows 2% and 4%}. at the least i'd be very cautious if long and have stops in place.

http://stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=6&dy=0&i=p95437404766&r=6897.png

http://stockcharts.com/c-sc/sc?s=$NYAD&p=D&yr=0&mn=6&dy=0&i=p50966274753&r=5236.png

[BearItch]

Aire Thanks. Looking at the SPX, this would equate currently to SPX 1446 to 1476. Am I correct? Looking at the history of this indicator, it would seem that the decline does not have to be immediate but given your timeframe for a larger cycle lows in July, it would seem that time is running short. Is this setting up to be the roll into the nest of July lows in your eyes? I assume it is premature to give those targets.

[eminimee]

nothing to do with indu...but watching this as possible....looks too bloody obvious though...which probably means it won't happen.

http://stockcharts.c...4597&r=2367.png

[VolPivots]

Aire, hope you're right about the sell signal so there's actually some value out there, but I dunno....in the world of high frequency VST trading, 6-7 day low may hold for a while. Black bid-ask oscillator and momentum both at levels that have been bought everytime since March. Seems engineered as OEX states, plus we're working the best Quarterly candlestick in years fwiw....

[airedale88]

looking at the history i have of this signal (incomplete, late 70's to early 90's) some resulted in immediate drops, some took a number of months. i think the prudent thing to do is to acknowledge it as a major caution flag, especially when combined with an expected mid/late july 4.5 yr nest of cycle lows

[...]

turns negative

What's the basis of the zero line? Is it normalized somehow?

I ask because the absolute level of a cumulative advance/decline line, or a moving average thereof, which by nature starts from some arbitrary point, has no particular significance. Sort of like the MCO crossing zero. Means nothing. Might mean something in relation to previous highs or lows, but other than that, the absolute level is meaningless because the absolute level is dependent on the arbitrary starting point.

There might be some level, +this or -that, which turns out to be significant based on observed history using whatever arbitrary starting point, but the liklihood of zero having any particular significance under that scenario is almost zero. Which is the same liklihood that +5 or-50 or +100 or -75 or any other number has any particular significance.

Not a criticism, just wondering about a possible flaw in the trigger. I enjoy your posts.

[airedale88]

"I ask because the absolute level of a cumulative advance/decline line, or a moving average thereof, which by nature starts from some arbitrary point, has no particular significance." this is not a moving average of a cumulative a/d line. it is a 21 day moving average of the daily adv minus dcl data. it will oscillate from negative to positive and is not dependent on an arbitrary point where the computation started.

[...]

Thanks for the clarification. And thanks for your posts, I always find them interesting, unlike many.