Rob,
BradCCI... Very interesting indicator!
Been playing with the following modification to standard CCI(13) with very interesting results. Might give it a try. The basic idea was developed by Brad Weller, another good 'ole Georgia boy and Biloxi attendee. I simply call it BradCCI. Here's TradeStation (SuperCharts) setup:
Input Name Default Value
xt (H+L+C)/3
axt average(close,28) uses simple moving average
md stddev(close,28)
Inputs are: xt, axt and md
Plot Name Formula
Plot1 (xt-axt)/.015*md
Plot2 stddev((H+L+C)/3,28)
Overlay BradCCI and MACD(5,35,4) in one plot and put standard CCI(13) in another plot. Now lets look at your PACC.
Note CCI(13) reverses from overbought (above 200 by Richard's standards) on 1/6/97. But important you notice that MACD has NOT confirmed this signal. In fact, MACD doesn't confirm till 1/23. Note that BradCCI reaches its peak on 1/21and is beginning to decline when MACD reached its peak one day later (1/22). Having looked at many charts with BradCCI I've concluded price tends to follow BradCCI.
CCI(13) peaked briefly above 200 on 4/9 but we'll pass this one (same analysis as before) and move to CCI(13) peak on 5/12. At this moment, BradCCI was just moving above its neutral line (dotted line on my charts) implying a likely price move to the upside (BradCCI considered Bullish when above dotted line and Bearish below). Sure enough, as CCI(13) continued to decline indicating weakness, BradCCI was moving upward as was the price. CCI(13) registered +338.52 at its peak on 5/12 but 159.99 on 5/27 when BradCCI reached its peak. Note too that MACD peaked on this date. I think there's significance when BradCCI and MACD peak at same point. I actually use Bressert's RedLIne indicater for this purpose but recognize most don't have this tool so offer MACD as a proxy. In any event, I would have sold PACC on 5/28 looking at nothing more than this set of indicators.
Weakness of BradCCI when used by itself is that one never knows how high is high or how low is low. I've tried it with Stochastics and Williams %R as well as BBands and MACD(5,35,4). Think MACD best proxy.
Will be talking more about this indicator at TAOTN -Jersey next month. Sorry about format of this post. Can't seem to do anything about it.
Bill |
