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Strategies & Market Trends : Waiting for the big Kahuna

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To: Monty Lenard who wrote (25177)	8/25/1998 8:20:00 PM
From: Vitas	Read Replies (1) of 94695

McClellan Humor The greater number of issues traded on the NYSE definitely has an effect on the amplitude of the Oscillator and Summation Index. By the way, our calculations showed that the all-time low was at -2247 on May 27, 1970. On an adjusted basis, this equates to around -6200 given the current number of issues traded. Wouldn't that be scary?! The reason that 1000 is used as the neutral level on the A-D Summation Index goes back to the days of manual calculation. Sherman and Marian did not like having to deal with negative numbers because without even a hand held calculator the negative numbers made the calculations somewhat more difficult. They had noticed that the Summation Index had a total amplitude of about 2000 points, so they recalculated all of their existing data (1962-1970) to move the neutral level to +1000 so as to avoid having negative numbers, except in unusual circumstances. You can make an adjustment for the greater number of issues mathematically by using the ratio adjusted formula, or mentally by just noting that the levels are not the same. The choice is up to you. Thanks for asking. Tom McClellan

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