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Strategies & Market Trends : MACD has been good to me....How about You? -- Ignore unavailable to you. Want to Upgrade?

To: TLindt who wrote (209)	9/13/1998 7:02:00 AM
From: Doug (Htfd,CT)	Respond to of 1109

Tom, you appear to see a buy point when the slow/fast lines cross, even if below the center line. At clearstation.com, which has some educational material and quant signals using MACD, they see a "green light" only when 1) the lines cross above the center line, or 2) if the slow line rises above the center line after crossing the fast line at a lower point (I'm wholly new at this, so I'm probably confusing with my inartful expressions). The point being, they discount crossings below the centerline. Is your approach simply more aggressive? My concern is that an aggressive approach may be costly at a point where a stock is changing from an uptrend to a downtrend ... I looked at MCD on Ask Research, using the 8-17-9 setting (http://askresearch.com/) ... like many "blues", MCD turned down from a high over $70. After its price fell below its moving average, the fast line has stayed below the center line on the MACD chart. Ask Research's red bars (fast?) lifted above the green line (slow?) around the eigth trading day of August .... when MCD was about $65 ... the red bars just cleared the centerline before turning back down, and the green line fell short of the centerline. MCD was about $62 about then ... below the buy signal. The red bars fell back as far as before, and now there is a repetition of the weak price action ... but the red bars have risen slightly above the green line last week, and are now "kissing." (isn't it sweet?) Can you discuss the pros and cons of waiting for the slow line to cross center before calling a "buy" and how the existence of a bull or bear market may affect that strategy? What I'm concerned is buying on false signals like those in April, June and July on stocks like TLDCF, which has been in a steady decline with the fast/slow lines "cemented" for a while. (Although clearstation flashed a 'green' on it because the slow line rose above center on Friday, for the first time since early April. Doug