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Strategies & Market Trends : Stock Attack II - A Complete Analysis
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To: Vitas who wrote (30236)2/19/2002 1:01:53 AM
From: John Pitera  Read Replies (2) of 52237
 
Hi Vitas, Question: the NASD TRIN 50 is a 50 day summation of the past 50 days closing TRINQ number right?

I had to think about your red line 100/2 TRINQ. That's the summation of the last 100 market closings on TRINQ divided by 2 so that it can be compared to the 50 Day TRINQ.

What command do you use in MetaStock to create the 50 period summation line?

When we look at the past 10 or 15 years of these summation numbers, we should expect to see larger extreme summation readings, such as we saw in early 2000 ( a very low reading)
and very high summation readings that we saw in April of 2001.

My thinking on that is that with a larger number of stocks in the NASD and also the much greater trading volumes, It's possible to generate a greater extremes, both big numbers like 3.00 or 5.00 on a very bearish day, and very low .28 numbers on bullish days.

I've talked with McClellan about this and he's found he needs to use a factoring ratio to compare his summation numbers today with those of 20 years ago.

You can also see this phenomenon in the TICK numbers that are generated during the day. Mark Cook, who is profiled in Jack Schwager's "Stock Market Wizards" book talks about how he keeps track of the amount of time during the day the TICK is above or below the + 400 or - 400 area. He uses this to help him find when the market is getting overdone.

what he does is considers it neutral when it's between + 400 and - 400, when it goes outside of the neutral band he takes readings at fixed intervals and starts a summation index of the readings. When the cummulative tick number gets below the 5 percentile based on historical numbers he buys. When It gets above the 95 percentile reading he sells.

I really like this idea and have been starting to do some work on it. It's described on page 107-108 on the hardcover edition of the book.

John
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