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To: ftth who wrote (173)	6/5/1998 11:38:00 PM
From: ftth	Respond to of 237

[Why the Chaikin A/D doesn't include the open]: (From an interview with Marc Chaikin in TASC) -------------------------------- Did you continue to research other techniques? I had already been looking more closely at using volume and demand supply analysis in particular. I became very familiar with the work of Larry Williams, Joe Granville, R.W. Mansfield and David Bostian. I started monitoring the Williams accumulation/distribution line and a three-day/10-day oscillator of that line. That was as good a technique as any for spotting short-term entry points and divergences between price action and volume on a daily basis. How many stocks did you follow? I was doing the computations by hand, which limited me to following only 20 to 30 stocks. It was a lot of work each day. If I went on vacation, it was just agonizing to get caught up after we got back. I ran into a problem in 1974, when the newspapers stopped carrying the opening price for stocks that I needed for some of the indicators. So I developed a new oscillator that didn't need the opening. This oscillator used volume and the relationship between the closing price and the day's price range. It became known as the Chaikin oscillator, which is in most software technical analysis packages today.

To: ftth who wrote (173)	6/6/1998 10:19:00 AM
From: Spots	Read Replies (1) \| Respond to of 237

Now you're beginning to tell me something I didn't know (yes, I understand the dividends, not a problem). However, it appears either that Ms. Green had a sex-change operation or that Mr. Blue had a color-change operation in the middle <g>, or something. Anyhow, I got a little lost by Mr Green in the library with the candlestick chart, so let me try to restate it; please correct as necessary: 1. A owns 100 XYZ in a margin account at broker (i). XYZ has (i) as the owner of record, and (i) keeps the 100 XYZ FBO A. 2. B places an order with (i) to short 100 XYZ, so (i) borrows 100 XYZ from B. 3. (i) crosses the trade with cash customer C (raking off the spread), and C requests delivery of the certificate. 4. (i) surrenders the borrowed shares to XYZ who transfers ownership from (i) to C and issues a certificate to C. (i) charges C a large fee for the service. 5. The annual XYZ stockholder meeting is scheduled, and in due course management solicits proxies from shareholders of record. Ok, stop the clock. Let's assume that (i) has no other holders of XYZ (which is probably against the rules as it would correspond to a zero reserve requirement, but assume it for the moment, for discussion). What I interpret from your post is that A doesn't get a proxy, since (i) doesn't have any XYZ left to vote FBO A. B, of course, would never get a proxy (a negative proxie ?<G>). C gets a proxy directly from XYZ management being a stockholder of record. Correct so far? More generally, suppose broker (i) had 100,000 XYZ in margin accounts when B shorted 100 shares, and suppose no other customers of (i) are short XYZ. Then (i) has 99,000 XYZ left after delivering 100 to C (via XYZ transfer agent). Now (i) has 99,000 shares to vote FBO margin account holders. (i) presumably designates SOMEBODY (or bodies more generally) who won't get a vote or who will get a vote. Is there a published procedure for this? A lottery (probably rigged) like assigning option exercises? Are there rules about this? or does each broker roll his own? Ok for votes; now for the float. In the original example ((i) delivers 100 sh from A to C) you might argue that the float isn't increased because there are really only 100 XYZ available on the market. C clearly can sell his 100 shares, but if A tried to sell, (i) would make B cover, which would take 100 shares off the market as A's 100 shares came on, a net of 100 shares (100 from A, 100 from C, -100 from B). BUT more generally, (i) may have 99,000 XYZ left and can easily supply A with 100 shares to sell while C sells his 100, and B is still short (like a bank making a loan without hitting the Fed reserve limit). OR (i) may have a deal with broker (ii) to borrow XYZ (like a bank borrowing from the Fed to meet reserve requirements). Either of these moves actually increases the number of shares available on the open market, in the exact same way that bank loans increase the money supply. Of course if ALL the shares were marketed at once it would collapse in a vicious short squeeze (just like a bank gets squeezed if demand depositors all try to take their money out), but that doesn't happen too often. I'd call this increasing the float. Maybe not quite as smooth as the Fed, but a very similar procedure. If that's wrong, how so? Spots