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To: scouser who wrote (941)	12/27/1999 10:35:00 AM
From: CIMA	Respond to of 2182

From EquityAlerts: Are You Using the Chaikin Oscillator Yet? Last week, we brought you a short summary of the a/d oscillator; now, it's time to delve deeper into just one more way to mine this indicator further. By definition, the Chaikin Oscillator is simply calculated by subtracting a 10-period exponential moving average of the a/d line from a 3-period exponential moving average of the a/d line. Developed by Marc Chaikin in the early 1970's, this indicator has quickly gained notoriety as an excellent calculator to help identify tops and bottoms, both short-term and intermediate-term. Three basic premises provide the foundation for this indicator: One, the notion that accumulation forces a stock or market average to close above its midpoint for the day; two, the ideal that a "healthy" advance will typically be accompanied by rising volume and strong volume accumulation; and, three, the belief that the Chaikin Oscillator will allow you to gauge the flow of volume into and out of the market. The absolute best way to understand how to use this indicator is provided by its creator, Marc Chaikin. He states, "The most important signal generated by the Chaikin Oscillator occurs when prices reach a new high or new low for a swing, particularly at an overbought or oversold level, and the oscillator fails to exceed its previous extreme reading and then reverses direction." Those signals in the direction of the intermediate trend are typically more reliable than those against the same, and, "A confirmed high or low" continues Mr. Chaikin, "does not imply any further price action in that direction. I view that as a non-event." Though extrapolated from the a/d line, this is not an indicator easily understood by the first-time investor. Of the many subtleties, nuances, and even complexities associated with this indicator, we have only touched on one, and urge you to follow through with your own additional research and back-testing (we'll delve into "back-testing" some other day!).