UnBelievable,
Looking at PMCS as an example, only one of all of the 1/2 hour candles were black, and it was very small. Prices went up consistently throughout the day but most of the transactions were sales.
I did look at PMCS, and I'm not seeing anything like what you are saying here for it's money flow. On every time frame I can chart for Friday: 1, 2, 3, 5, 6, 10, 15, and 30 minutes I see Money Flow trending higher all day long.
I have seen a couple of variations on the Money Flow Indicator, one of them being at this link
equis.com
All the ones I have seen use the high+low+close/3 for the price related to that bar, then multiply by the volume of the bar to get the money moved. Some then use a flow factor which is a scale from -1 to +1 that depends on the position of the close relative to the high and low of the bar. The one in the link seems to use comparative closing prices rather than the flow factor, with and all or nothing up or down for each bar.
These are a bit more detailed than the description you quoted, but by that description the only way the indicator could be negative on the day is if it is being calculated on a time frame other than the bars you are looking at (tick by tick perhaps), and the distribution of transaction prices conspired to make all but one of those bars misleading. If only one candle was black, and the calculation is being done on the time frame you are looking at, the bulk of the days volume would have to be in that one candle for Money Flow to come out negative on the day.
By a definition that uses the flow factor, it could be negative if every up bar had a long upper shadow with a small lower shadow, but that would be extraordinary, and I just don't see it. LDIG had a strange volume distribution for the day, with a huge early transaction, and money flow was a bit weird; it jumped up early and stayed there. The other four big ones all look reasonable to me.
Do you have some examples of the stocks that went up but had negative money flow?
Dan |
