Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Debra Orlow who wrote (3099)	12/30/1998 8:24:00 AM
From: marc chatman	Read Replies (2) \| Respond to of 99985

Debra, what is a "3-month cycle MACD?" When I look at daily charts for most major indexes, I see the macd histogram making a higher high than at the last price peak (except for the djia, if it breaks to a new high).

To: Debra Orlow who wrote (3099)	12/30/1998 8:46:00 AM
From: Terry Whitman	Read Replies (1) \| Respond to of 99985

I too am unsure of the MACD divergences you speak of. The old saying -"A picture is worth a thousand words," is quite true. A picture with an explanation is probably worth 10 times that. Here's my bearish divergence picture, with words: decisionpoint.com <<The 1% EMA is a significant momentum indicator. Stan Weinstein refers to a 200 day simple moving average (very similar to the exponential average) in his book, and suggests that it gives BUY and SELL signals when it crosses the zero line. That is one way to use it, but the problem with that is you miss too much of the move, and you do have to watch out for whipsaw. (We have charts in the Long Term Index Library going back to 1970 on this indicator.) I find it much more useful to watch where it tops and bottoms. For example, in 1990, when the Dow made two successive new highs, the 1% EMA was topping BELOW the zero line. The 1990 Bear Market followed immediately after the second top. Again in late 1994, as the Dow was putting in a double top, this indicator was topping below the zero line. The market subsequently went to its final low prior to the monster rally of 1995. >> Though we have not seen this play out fully yet, it looks highly likely to me that the current 1% A/D line is going to top out below the zero line, in conjunction with a new high in the major indexes. Firmly in the bear camp, TW