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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: Chip McVickar who wrote (15989)	6/4/1999 10:19:00 PM
From: Vitas	Read Replies (1) of 99985

Chip, I've been using a ratio 25 day average, on both an a-d basis and an up down volume basis, using advances/advances + declines the shape of the oscillator is similar to the advances/decline formula. theoretically both should cross .5 and 1 at the same time (the equivalent of the zero line) but apparently the first one crosses earlier on the downside and the latter crosses earlier on the upside. There appear to be minor divergences between the two which may at times be useful for signals. I would also add the rule that when the indicator reaches an extremely high reading, beyond the normal bounds, that this indicates a breadth thrust condition that the market will continue in that direction for the intermediate term, with only minor pullbacks. I use composite advance decline figures as published by WSJ and Barron's, as they are consistent and include trading on the regional exchanges after the New York close (probably just the Pacific Exchange). They are available after 7 p.m. at the WSJ interactive edition website. There are different ways of computing a-d figures, and if the source relies on satellite transmission there can be errors in the data, so it is best to stick with one reliable source. Decision point has a free database from 1980 which I believe uses WSJ figures, although the most recent day may not yet reflect them exactly. What cyclically oriented formulas does Gietzen present? Vitas

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