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The
problem in this case probably has more to do with the precision of the
backadjusted prices. Two decimial point precision doesn't cut
it. There should be at least six digits after the
decimal. VV, for instance, only has two. Not only
that, VV rounded to the nearest ten cents in the early
years!!
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<FONT face="Times New Roman"
size=2>-----Original Message-----From: Ken Close
[mailto:closeks@xxxxxxxx]Sent: Thursday, September 11, 2003 10:31
AMTo: AmiBroker ListSubject: [amibroker] Unusual
Happening with Adjusted PricesChuck Rademacher has
often mentioned the perils of adjusted price dataand he keeps unadjusted
prices (close price only I think) in hisextensive database.I came
upon something just now that illuminates his comments.I have a
Stochastics RSI indicator from Chas Richards Headsup file andit
is:Low1=LLV(C,21);High1=HHV(C,21);RSISTO=(EMA(100*(C -
Low1)/(High1 - Low1+0.0001),13)/2) +(RSIa(C,14)/2);I plot this in
IB and do an explore using it and some other factors.Today, TARO
popped up on my explore as a buy, and when I looked at mycollection of
plotted indicators, RSISTO was "Empty" (flat line).After some
detective work, I discovered that back in 1990, the adjustedclose prices
produced a situation where the Low1 = the High1 in theabove equation,
giving it a empty value that never corrected itself.The 0.0001 factor in
the above equation was NOT in my original equation,but will serve to avoid
division by zero.A further explore showed this to be the only stock in
a 1700+ symbolwatchlist, but nonetheless, it might occur on some other
symbol andpoints out the lack of credibility (or lack thereof) of adjusted
pricesthat drop down into the pennies level.Just for your
information.....KenSend
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