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

To: Cal Gary who wrote (6184)	12/13/2000 2:10:24 AM
From: Joe Krupa	Read Replies (2) \| Respond to of 14101

Hi Calgary, Thanks for sharing your thoughts on the A/D line. I would like to clarify a couple things from my post, which I think could have/should have been expressed better. First off, you mentioned, "So, you wrote 'line IS confirming both the direction AND magnitude of the price movement.' Doah!! Nope." Reading my original post, I realize I did not make specific reference to what price movement the "line is confirming." I was referring to only the most recent price movement, since the UK final approval. As to your point, there was most certainly divergence through most of the summer and fall as the price slipped, but the A/D line was flat. You also provided the following explanation of the A/D line, "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)" That is absolutely right. I think you assumed from my layman's definition that I was misunderstanding the indicator. I had said "At its most basic definition, the A/D line is a measure of conviction, or lack thereof, underlying the price movement." The disconnect here is that I did not mention "volume" as a key component of the A/D equation. Again, poor choice of phrasing on my part. By "conviction," volume is exactly what I was referring to. A price movement with significant volume behind it, can be said to have market "conviction" behind it. Calgary, I hope I don't sound sour for being misunderstood -- I'm not at all. I just wanted to indicate that we are more on the same page than you may have thought. Nevertheless, you did express your ideas in text better than I expressed them to myself in thought. Your explanation helped clarify my own thinking on the line and the 6 months that was. I do find the story, told the A/D line, fascinating. Very often, as with anything in life, you need to apply a concept to a situation which is real in your life, to fully understand that concept. Textbook examples just don't cut it. And let me tell you, as far as being "real in my life," this summer's slide in share price was all too real. Hey, btw, thanks for the accolades for coining the "drip bucket" effect. Can't believe I'm the first person who ever invoked that metaphor, but I'll accept the credit just the same. The metaphor seemed so appropriate at the time, that a vision of spring sap buckets in a forest of maples, just kept replaying in my mind. Please keep those TA thoughts and postcards coming. I find TA fascinating and continue to learn from veterans like yourself. My background is in marketing/marketing research, so reading the road maps of behaviour is something I feel is vital to the exercise. Humble regards, Joe