[amibroker] Smart Money & the MAAD Indicator

["Richard" <areehoi@xxxxxxxxx>]

Is anyone using the MAAD indicator?  It is based on an article in Futures magazine back in June about "Smart Money" by Robert McCurtain. Here's a brief outline:  Smart money is in the market for the most liquid and highly capitalized securities available. Those funds must go into and out of the market via large blocks of stock. It isn't practical for a multi-billion dollar hedge, or mutual fund, to attempt to buy $100 million worth of a low-cap stock selling for $2 a share. On a given trading day, the 20 most actively traded issues on the NYSE can constitute 30% to 50% of composite exchange volume. It follows that one should follow the volume leaders when creating a gauge of the internal strength or weakness of the market.  Once the volume leaders are recorded, a simple tally of the 20 most active positive issues vs. the negative issues will yield a net number that can be added to a classic advance/decline line. 
This advance/decline line is called the most actives advance/decline line (MAAD). To implement simply take the TOP 20 or 25 of the NYSE Most Actives (by volume) each day, or each week, and count the number of up issues and then the number of down issues. Unchanged issues are not counted. Then net the ups against the downs and plot that net difference into a cumulative advance decline line. That's it. There's no more.
I have a put a copy of the article in the "files "section of this group.  I have a spreadsheet of the daily data (NYSE top 20) going back to July 2008 and would be happy to send to anyone interested. 

Dick H




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