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To: JPR who wrote (5041)	1/21/1998 4:23:00 PM
From: Robert Graham	Read Replies (2) \| Respond to of 42787

I have just come across an interesting approach to TA, specifically MAs. The author of this approach suggests that there is a an inadequacy with traditional MAs, which include for instance the SMAs and EMAs. He suggests that when there is a move of new money into a stock that creates a price breakout, the MA should be calculated from this point in time. I have not gone through the specifics on how this MA is calculated, but it appears to be a descrete, displaced MA, what he refers to as an "anchored" MA, instead of the normal continuous MA that is calculated at the beginning of whatever timeframe you are interested in. This does bring up an interesting observation. When a new price is incorporated into the calculation of a MA, it impacts the MA at two places. The first place is the first day it enters into the calculation. The second place is when it "drops off" of the MA calculation. If this particular price is more of an impulse (significantly apart from its surrounding prices), then this can potentially lead to false indications during the time length of the MA. This would be aprticularily true for snall MAs. I think this effect is actually neglegible most of the time, even thought there may be particular spacial cases where the technician can see the effect of this "discontinuous" price. Also, the palcement of the MA starting at the beginning of your data set is rather arbitrary. Getting back to this approach to TA that I have recently come across, the name of this approach is called MIDAS. This was devloped by a theoretical physicst that started out as a runner on the floor of the stock exchange, and returned to stocks after he helped founded and sold a scientific/engineering type of company. He does demonstrate compentency in how numbers can be handled which allowed him to derive this approach, along with a new way to display summary data on stocks called a "scatter plot". From what I can see, his approach appears to have merit. Perhaps there is something to learn form his techique. He does consider his approach just another tool in the toolkit of the technician, and that his brand of TA is best used in conjunction with other more traditional indicators. I will definitely spend more time looking into this different apperoach to TA. Bob Graham