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Strategies & Market Trends : Raptor's Den II

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To: Paul Shread who wrote (407)	4/21/2003 9:09:54 PM
From: da_cheif™	Read Replies (1) of 3432

Daily ad line is worthless as an indicator when not combined with volume (IE. our propietary CLX analysis that is provided via a tutorial on a thread here on SI} and to prove that there are 2 lessons to learn....first the daily ad line topped in the 50s and is only now on the verge of taking that high out and imho will probably be coincident with the epicenter of primary wave 3 up....second the mechanics of a declining daily ad line under certain circumstances such as a sharply rising market, either of an index or individual stocks is easy to figure out....its the 1 giant step forward and 5 baby steps back that has an over all ad line crumble while price is trending upward at a violent clip....think about it...if a stock is up 5 pts on a monday and gives up an a fraction a day for 5 days or 6 or 7 then rockets ahead 3 pts in one day then corrects in baby steps and keeps doin it,,you can see that the ad line has nothing to do with amplitude, a glance at any chart book will reveal numerous examples of this phenomena.....to smooth that out you use a weekly ad line......when a corrective process develops after a long hard advance then the action of the weekly ad line becomes even more important because it will then reveal the real substance of the correction...now some will say a that a rising weekly ad line without the price rising dramatically is bearish..well i beg to differ...simply put the advance of the 90s spoiled everybody and those that did not participate in the advance of the nineties have little to fall back on in terms of experience......in the summer of 1987 the market exploded out of its may bottom and went up about 30% yet the weekly ad line never took out the march87 highs even tho the advance from may took twice the time of the march may decline.....there by setting up a nasty negative divergence which of course the bulls ignored and led to a crash....now we have the opposite situation on an a grander scale....3 years...the weekly ad line is building a monster positive divergence that the bears are ignoring.....and therefore another reason to expect a crash up......given the very bullish long term EW count and the fact that the largest measure of market activity the Value Line index is much closer to its all time high then its 1998 low gives us another clew of wat to expect...back in the late 70s and early 80.s i was bearish all the time...Granville was my hero...the common stock ad line was lagging all the time...nobody talked about the weekly ad line...i learned quick that being bearish was easy..anybody could do it...being bullish was and is allways tuff.......all this is but just a part of the bullish clues....there are many more....technically the bears really havent presented me a case to support their bearish out look.....

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