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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 14 4:00 PM EST

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To: donald sew who wrote (6048)	2/11/1999 8:50:00 AM
From: Vitas	Read Replies (2) of 99985

The Hindenberg indicator which flashed a sell on January 29th is comprised of new highs and new lows both being over 86 on the same day (over 2.4% of issues traded), while the McClellan oscillator is below zero and the NYSE is in a 10 week uptrend. It was developed by Jim Miekka and named by Kennedy Gammage, who noted that the market usually crashes and burns after the signal. Norman Fosback developed the High-Low logic Index. It is computed as the lesser of the number of new highs or of new lows divided by the total number of issues traded. "The concept of the indicator is that either a large number of stocks will reach new highs or a large number will establish new lows, but normally not both at the same time. Since the High Low Logic Index is the higher of the new ratios, high readings are infrequent. When a high indicator reading does occur, it signifies that market internals are inconsistent with many stocks reaching new highs at the same time that many stocks establish new lows. Such a condition is considered bearish for stock prices." quote from The Encyclopedia of Technical Market Indicators. Vitas

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