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Strategies & Market Trends : Technical Analysis- Indicators & Systems

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To: Clueless who wrote (1221)	5/26/1997 8:57:00 PM
From: Bruce A. Bowman	of 3325

Mark- Couple thoughts re: OBV() alternatives: 1- you might look at either money flow or volume accumulation percent as alternatives. 2- I haven't tried to code this, but consider accumulating the products of (H-C)V and (C-L)V. It's a way of distributing the volume both plus and minus as a function of daily range. I tried using Wilder's ATR() some time ago, but don't recall I reached any startling conclusions. 3- try using the pair of indicators called positive volume index and negative volume index. These 2 indicators accumulate the daily change in price depending on whether volume was greater or less than the previous day. Like OBV they drift up or down without limit and you'd use the slope of the 2 to confirm another indicator. The concept is that smart money buys on shrinking volume and is reflected in N-Vol while P-Vol reflects the herd. If volume is shrinking, N-Vol declines or rises as a function of daily price change. If volume is expanding, N-Vol is static and P-Vol is either rising or falling. These are longer term indicators and I believe that divergence is a leading inidicator of an exit, i.e. N-Vol dropping and P-Vol rising or flat. Bruce

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