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Strategies & Market Trends : TA Science Projects & Experimental Indicators -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (93)	3/19/1998 10:18:00 PM
From: ftth	Read Replies (2) \| Respond to of 237

What's up with COGIF today? 1.6 million shares traded (about 10% of the float), 60,000 is the average. Some BIG buyers today during a short burst around 3pm. Many 20-50k share blocks and a half million share block (this "person" is now a 5% holder). Then it gives back a half point at the close on no volume. In otherwords, today's large accumulation was cleverly disguised by the decline at the close on no significant selling pressure, for minimal net gain for the day. "Quiet Accumulation" as they say. Arguably in the midst of an ascending triangle. This is a perfect example of some of the shortfalls with accumulation/distribution measures. Using {[(c-o)/(h-l)]* volume} as the measure for today's A-D gives a net accumulation of 114k shares, yet I saw for myself (well, heard over the phone via my broker's NAZ level 2) that almost all of todays volume was demand. An OB/OS indicator based on the above formula (which most are, or very nearly this) will never be accurate from this point forward in this stock, until it has a selloff, and reaches equilibrium again. To use 114k shares as todays net accumulation (based on the above formula) would give faulty (late) signals for overbought conditions some time in the future, because potential supply (selling pressure) at higher levels is not being accurately modeled by that A-D formula shown above. Yet you would never know this if you were just running JoeBlow's Overbought/Oversold indicator using just O-H-L-C-V daily data. This is exactly why I wish there were a data service that included not just total volume, but the volume of, say, the 10 largest trades for the day in addition to the total volume. You'd have to make an educated guess which side they were on, but the large block trading activity, and day-to-day changes and trends therein, is probably? a better indicator of future price direction than intraday A-D or price swing data (just a thought based on watching many intraday charts, I have no proof of this). This would probably be a useful way to make an Accumulation/Distribution indicator adaptive (based on large block significance)?? P.S. Take a peek at CHRZ on a 1-yr daily chart. I've never spent much time studying diamond formations (mainly because they're hard to find), but there are 3 in this one chart. First one broke the formation 8/15; the second on 2/4 and the third....tomorrow? No intentions of trading it, just watching it out of curiosity dh