Gary,
Your calculation of moneyflow correctly reflects the formula
you provide:
(((Close - Low)-(High-Close)) / (High- Low)) * Volume
How absolutely worthless the indicator is became clear
to me when I reviewed the data for ASND on Dec 4 & 5:
Dec 4 close = 26.875
Dec 5 open = 29.75
high = 32.25
low = 28.375
close = 28.94
The MF value for Dec 5 is about -$21,300,000.
If ASND had traded ALL DAY at its
low price of 28.375, that would have
been 30,146,000 shares, each up
1 1/2 over the prior close. This MF is +$45,000,000
And, of course, ASND did NOT trade
at its low all day but ranged as
high as up 5 3/8.
A more defensible approach, and one
which as well, does not involve the
opening price is to use the average of
high and low times the day volume.
This is:
((1 1/2 + 5 3/8)/2)*30,146,000
or 3 7/16 * 30.146m or about +$104,000,000
I don't want to beat a dead horse,
but for an indicator to be
-21m versus a clear worst case of
+45m or a realistic value of
+104m, persuades me to avoid it.
I think this explains many moneyflow
plots which are puzzling & counter-intuitive.
In the course of a year, the anomalies on the
low end are probable close to those on the
high end. But, maybe not.
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