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Strategies & Market Trends : The Thread -- Ignore unavailable to you. Want to Upgrade?

To: JLS who wrote (12476)	9/1/2000 10:59:51 AM
From: charlie mcgeehan	Read Replies (3) \| Respond to of 49816

julie the cci is the commodity channel index. i am going to copy a definition from the book "technical analysis from a to z" by steven b achelis. he explains it much better than i can "the cci measures the variation of a security's price from its statistical mean. high values show that prices are unusually high compared to average prices, whereas low values indicate that prices are unusually low. contrary to its name, the cci can be used effectively on any type of security, not just commodities. there are two basic methods of interpreting the cci: looking for divergences and as an overbought/oversold indicator. a divergence occurs when the security's prices are making new highs while the cci is failing to surpass its previous highs. this classic divergence is usually followed by a correction in the security's price. the cci typicaaly oscillates between+/-100. to use the cci as an overbought/oversold indicator, readings above +100 imply an overbought condition(and a pending price correction) while readings below-100 imply an oversold condition (and a pending rally). i use the 5 day cci and find it a superior timing mechanism.there are so many indicators that you can literally baffle yourself with bs. i try and stick to a few very basic ones that work well for me. 5 day cci is one. hope that helps charlie