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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (32992)	11/9/1999 6:16:00 PM
From: Ken98	Read Replies (1) \| Respond to of 99985

LG, excellent chart and excellent analysis as always. I question however how helpful most TA is during this blowoff phase to pick any reversal. Most indicators are beyond overbought and most cautionary formations like the ones in your chart get run over by this train. If the Naz futures are already up over 22 on the heels of the CSCO announcement (trading at 78) and the PPI number is "in line with expectations" (any doubt that it won't be?) then the indicators will get even more overbought and more formations negated. This is not a knock on your analysis at all, but just my take. Trying to trade any sort of reversal in this environment can be hazardous to one's health (and wealth). Do you think those gaps will ever get filled? Regards, Ken.

To: HairBall who wrote (32992)	11/9/1999 7:49:00 PM
From: Casaubon	Read Replies (2) \| Respond to of 99985

LG, when using the DMI indicator IQC says the following: 1.ADX should be rising 2.ADX should be above 50 3.Confirmation from another indicator is encouraged pointing towards strong trending or volatility characteristics. A more strict interpretation of the Directional Moving Index calls for a fourth criterion to be met. For an uptrend to be valid, the price of the security must rise above the high of the day that the +DI crossed above the -DI. For a downtrend to be valid, the price of the security must dip below the low of the day that the +DI crossed under the -DI. All these criteria never occur simultaneously. Do you use a single criteria here for confirmation of the trend. For example, if the ADX is above 50 and +DI crosses over -DI, the trend is valid. Or, the ADX is rising when the +DI crossed over -DI (not rising AND above 50). Also, I noticed you placed value in the DI crossover when the ADX was flat and at a minima on the chart you just posted (it was the first crossover on that chart, where +DI crossed under -DI). Can you say something about why you consider that crossover as having trending predictability. I know this indicator has strength and I'm trying to get a better handle on it. Any insight you could provide would be greatly appreciated.