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Rick:
Correct. No indicator shuold be used blindly. Did you compare this with the
OBV?
Lionel
-----Original Message-----
From: HARELSDB@xxxxxxx <HARELSDB@xxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Wednesday, August 12, 1998 12:28 AM
Subject: Re: accumulation/distribution
>In a message dated 98-08-11 04:24:22 EDT, you write:
>
><< Bottom line is that all these accumulation/distribution indicators
(except
> for perhaps Lazlo Birnyni's Money Flow) are basically just "fun with
> numbers."
>
> regards,
> Rick >>
>
>I think I reached a similar general conclusion today through a different
>route.
> I am not familiar with Lazlo Birnyni's indicator, however, I have been
using
>the "Money Flow Index" found in Metastock as a confirmatory indicator.
>Roughly speaking, it is a volume weighted version of the Relative Strength
>Index.
>
>I have been short of Borg-Warner Automotive (BWA) for the last couple of
weeks
>and I am a little bit ahead. BWA was up today on volume that was much
heavier
>than average. I looked at the intraday chart on Excite.com and found that
>most of the volume came from a handful of very large trades that caused the
>price to move down. The trades that caused the price to move up were very
>much smaller and represented a much smaller fraction of the day's trading
>volume.
>
>Now to the fun with numbers. According to the Money Flow Index, BWA was
>accumulated today, however, examination of the intraday chart showed
>distribution very clearly. Over the long term, and who knows how long,
these
>kinds of errors probably average out. This situation, however, illustrates
a
>limitation of the Money Flow Index and the need to take it with a grain of
>salt.
>
>Dan
>Pocatello, ID USA
>
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