So does this count for my posts? >G<
Here is my summary, updated til tonight (read @ your own risk, could be full of errors for all I know $: ). If I forgot something, or something is incorrect...please say something.
I'll try and organize the rest later.
Best of Luck,
WHG?
Calculating the CLX...
As of 5/1/01
Calculating the CLX indicator: (use 2 notebooks 8 1/2x11 & Ampad Efficiency Quadril Pads (10 squares/inch) (22-006), or an MS Excel Spread sheet.
List index stocks in each book (eg. DJIA):
1) (In book 1) For each day, write down the volume(make sure to get the volume daily total past 9pm EST, to get the after hours trades), and dollar/penny change (in separate columns) (no daily change =no volume or neutral rating…ignore the day & continue with the current count).
2) (In book 2) Make a column of Volume & a column of Volume per Penny: Divide the volume by the change…drop the decimal. (no daily change=no volume)
3) Plot Volume breakouts: Add up the volume of any consecutive days in either direction til there is a change in direction. Assign either an UP or DOWN designation when the total of the preceding cumulative volume (of consecutive days) is retraced by more of the total of the cumulative volume in the opposite direction. If the current consecutive cumulative volume total does not exceed the prior consecutive cumulative volume total, give it a neutral.
4) Add up the total number of UP & DOWN designations in each book…thus = CLX (Climax) of the Main Volume: CLX of the Volume per Penny.
5) Keep two charts, segment them with lines on both sides of zero in the middle the lines are 5 squares apart…each horizontal square is one day…take the main volume clx & plot a 3 day, 10 day, & 30 day moving average. Make sure the 30 day is plotted @ 20 per square, the 10 day @ 2 per square, and the 3 day @ 1 per 5 squares. Once you get a picture of the moving averages, you can look @ the offsets (distance between them) to see how much life is left in a move. To get a turn in the penny/volume clx, the main volume clx must turn 1st.
6) Thus we plot a 3 day MA of the net difference of the volume per penny and main volume CLX…when this 3day MA of the difference gets to an extreme one way or another (Bullish<-3, Bearish >3)
7) then you wait for the offsets to run out, the cycle picture to line up, the fibonacci targets to be hit, the sentiment to get into great shape…the Elliot wave structure to get into a 5th wave…the CLX is a great confidence builder, when used in conjunction with the other tools of the trade. Look for the extremes of the CLX and for a divergence…the 1st signs of a bottom/top approaching.
8) Repeat CLX process using weekly closes, instead of daily closes.
9) Construct a daily page of the net volumes required to produce breakouts…to cross-check your work. Keep a log of all daily CLXs…after a while you’ll be able to know when to expect a change.
10) The CLX per penny is the accumulation or distribution phase beginning @ its earliest stages…best measured by the differential of the 2 CLXs on a 3 day MA…once the 3 day MA of the net difference of the 2 CLXs exceeds +or- 3, then you know that once the 10 day MA runs out of offsets you can usually count on a turn…It helps when the 30 day MA of the CLX also runs out of the neg or pos offsets.
11) The 3 day MA of the net difference of the 2 CLXs is the AYDIS.
12) When the AYDIS is +3 or above the market is vulnerable. If the AYDIS drops fast then you can see by the action that its only a matter of a day or two when the AYDIS is back to bullish minus territory. You can see this potential because of the great minus offsets in the 10 day MA of the CLXs that will support the advance…also helping the quick return in the 5 day arms and the % volume index back into bullish territory.
13) The 30 day MA & offsets are very important…more so than the 10 day MA & offsets.
14) As the 30 day MA of the CLX crosses up through the zero line you get an acceleration…not always but most of the time…sometimes it just keeps a slow pace…until the 30 day MA tops out and crosses below the zero line (you have a market in trouble)…usually about 30 days after, the MA tops out, the weekly numbers help pinpoint it a little better.
15) AYDIS >3 usually means a short term top…if you notice the offsets on the 30 day are bad for a few days….however there is so much selling overnight that produces a down gap opening the decline is usually over quickly…especially during the week of expiration…it normally looks very ugly one day and pretty the next.
16) Don’t worry about the 10day MA CLX per penny exceeding the 10day MA CLX…basically watch the 30 day MA of the CLX…if its still below the zero line…look at the offsets in front of you on the 30 day MA and you can see the amount of time there is left in the upswing…the 30 day MA has to get as far above the zero line by @ least the amount it was below it.
17) The AYDIS is on its own…don’t look at it relative to the other MA. Once the AYDIS gets extreme, you watch the offset on the 10 day and 30 day…if the 10 day has run out of good offsets then you got a possible turn…if the 30 day still has a good trend, then any correction in the 10 day MA may just stall the market. (eg. If the AYDIS is dropping fast, 10DayMA has 7 days of offsets to work off, and the 30 Day MA is climbing…pullback <eg. 04_24_01>). If one keeps a diary of the CLXs you’ll see that the 10 day MA has a shelf life of 10 days…(eg: we’ve had ~3days of negative CLXs, & if you look back @ the last 10 days, you’ll see that there are ~7 positive numbers to give up…these numbers don’t help the MA move up <04_24_01>).
18) If the 10 day MA of CLX bottoms on Thursday, and they close the Dow very high on Friday…9 out of 10 times there will be a decline on Monday.
19) If the cumulative AD line of the CLX keeps rising and plowing through negative offsets of the 10 day MA, that is confirmation that the power of the 30 day MA is still the dominant force, which is usually the case.
20) To help with our TA, use a 5 & 12 day RSI for the Dow with a half span MA. (eg if you are using a 12hr RSI, then make a 6hr MA of it). That will give you a clearer picture of the tops/bottoms. As you wait for crossover, a 5 day is too fast…thus we use both…for the half span of the 5 segment RSI I use 3.
21) Next project, pick 30 precious metals related issues & do the same stuff (goto step 1). Do a 5 & 12 day RSI of the Bullion, the XAU, the Goldman Sacs PM index, the Aussie gold Index, & the Johanesburg all gold index.
22) If the 30 day MA of the CLX closes on its zero line, sometimes within a day or so…or even right away…when that MA crosses the zero line the market kinda goes bonkers (melt up?). |
