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

To: James F. Hopkins who wrote (16198)	6/6/1999 7:40:00 PM
From: Casaubon	Read Replies (1) \| Respond to of 99985

The above may not be very close to the actual figures it's just there to provoke some thought This comment is with respect to the true import of volume. This is a very important issue to me, and I have been trying to do an analysis on a small cap stock which includes a volume analysis. I have followed this sole stock very closely now for 5 months (and less closely for many years). Having said that, I will state that I cannot find much of a hint about price direction in the volume! Even more interesting is the fact that in the face of a long term term (2 years) price decline, concommitant with a falling OBV (on balance volume), I have watched a steady accumulation by the major institutional holders (data provided from stocksmart pro)! In fact, while the price has declined to it a low seen last year, those same institutions have increased thier holdings by 11% during the last quarter! I have read two philosophies regarding "smart money". One says, look at the price action on high volume days to get an idea what smart money is doing, the other says look at price action on low volume days to see smart money in action. To date, I have not been able to find a correlation! Although, I have decided that 92 institutions increasing their holding by 11.28% in the last quarter isn't bearish despite the price decline <g> I guess it's just human nature that experts in any field get so full of themselves and develop mind sets taht in time become not only invalid but often out and out dangerous. exactly! This is a problem I encounter in science too frequently. Very intelligent, well educated, albeit arrogant, people have a truly transcendent idea that fails to be supported by data. They get caught up in the concept and can't let it go. They either commit suicide from frustration, waste thier brilliant careers pursuing a falsehood, outright falsify data to support the idea, or find something out of major significance beacause of serendipity associated with sheer tenacity. These people can never say, "oh well, I was wrong". PS at least I now have TA on my side indicating a bottom formation (three river bottom with a confirmed close above the center trough) on my stock. This time things will be different!