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Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: Joe Krupa who wrote (6139)	12/13/2000 1:16:57 AM
From: Cal Gary	Read Replies (1) \| Respond to of 14101

Hi Joe, "You'll go down in his-tor-y" (like Rudolf). The A/D line is a volume indicator. Like OBV. Marc Chailkin apparently didn't like the way OBV was tied to the previous day's close, so he created the A/D. A/D is a measure of how much volume was accumulation, and how much was distribution for the day only. Empirically assigned a value ranging from -1 to +1, then cumulated. Gaps don't count (unlike OBV which captures gaps). As you observed, the A/D aligned with the massive feb 2000 move and since March it has flat lined, until we broke below 6.00 in November. This pattern is what TAs look for, divergence. Almost 8 months of divergence! A/D flat lined, Price did not flat line. First we had the broken reverse H&S. A/D flat lined. The broken right arm. A/D flat lined. The broken right elbow (read HC). A/D flat lined. Then the broken right wrist (broke 6.00 by TD sell), this finally took A/D down as you observed. Even at its mid April lows, the head of the reverse H&S, this was reflected with only a dimple in the A/D line. So, you wrote "line IS confirming both the direction AND magnitude of the price movement. Doah!! Nope. However, your "drip bucket" analysis may make it into a Finance Textbook one day. During the long down trend, we were all watching the daily tape for a change in trading (ie attacking the the offer) before entering buys. And it didn't happen, day after day. What we kept seeing was accumulation taking place with your "drip bucket." Strong accumulation by the way. We saw the trees but missed the forest. During that time, for a volume indicator, I was watching the OBV. Doah! On a daily basis, there was strong accumulation taking place, but only on the buyers terms. DMX's management style and the regulatory delays led to a buyers market. Price was dragged down by the nose, but on a net basis, accumulation was taking place otherwise the A/D line would have been "confirming both the direction AND magnitude of the price movement. The key is, on a daily basis. Intraday. Not between days or interday. The TD sell did disturb the continuum. It was reflected on the A/D line. But not to a great degree, it was absorbed. These are just my thoughts on A/D. BWTHDIK <ggg>