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Rick,
I appreciate your comments, and the Lazlo Birinyi method is the most
precise way to do what I am striving to with my own formula (as yet
undisclosed). I simply don't have access to information at the level of
time-and-sales detail (with bid-ask information) -- most importantly --
available in the form of readily available historical databases spanning
years. My PC and MetaStock Professional couldn't handle the job of keeping
track of that quantity of data. Hence my Cumulative Allocated Volume
strategy, which uses readily available daily volume data, does that exist
to my knowledge among the canned MS indicators that we can apply to our
charts. I'm trying to go another level above OBV in accuracy.
The formula for the MetaStock ACCUMULATION-DISTRIBUTION Indicator in my
post is simply an e-mail form of the one contained in Steve Achelis
"Technical Analysis From A to Z", with MetaStock itself, and also
documented on the Equis web site. I put is there as a convenience to
readers. I didn't like the idea unlying its math, so I came up with my own.
At the same time, I probably should spend some time comparing this
indicator with my own.
As far as my own formula for CAV is concerned, it has not been optimized or
hand fitted to produce an intended result. It has yet to be backtested
except for the charts that you have seen posted. I simply decided
mathematically how it might be appropriate to allocate daily volume to
advancing, declining, and unchanged components, and then accumulated the
net volume in the same way as the "traditional" advancing and declining
volume chart would do. The difference between my CAV versus Granville OBV
and anonymous ACCUM-DIST is the underlying idea of what constitutes
advancing vs declining volume given only total daily volume.
My CAV is an attempt to approximate what is happening on the floor of the
exchanges and the computer-based NASDAQ. Everyone, including myself, is
simply getting a first look at the results of that idea. Whether it has
merit is yet to be established, but I do think it already is showing ways
of being superior to a simple adv-decl issues line or an adv-decl volume
line or an OBV line.
The Birinyi service-for-fee seems like the most accurate way to use
volume-price data. My CAV is the less affluent man's analysis of commonly
available data in a way that may prove benefical. The fact that we all can
look at commonly available O, H, L, C data doesn't mean that we will all
draw a common conclusion. Look at the abundance of technical indicators in
MetaStock, but then maybe you consider most or all of them to be irrelevant
to technical analysis. CAV might be something more substantial that just
"fun with numbers," but who knows at this time.
Probably I made a mistake in deciding to post this idea in this forum.
Joe
>Nice prose though I couldn't decipher your formula. But if your inputs are
>limited to the same O,H,L,C and V that everyone else uses, I can assure you
>that anything you come up with is just more "fun with numbers" as you've
>already deduced from examining other such publicly available money flow
>indicators. It looks good because you consciously (or unconsciously)
>optimized it to look good.
>
>On the other hand, there is a decent attempt at a EOD Money Flow indicator
>put out by Lazlo Biryiny(sp?) that keeps track of money flow on a
>tick-by-tick basis. Basically if the sale took place at the ASK then
>volume's positive; if at the BID, then it's negative. But his exact formula
>is still proprietary I think. I can only imagine that he has very
>powerful/large computing resources and databases.
>
>The indicator is available on the Bloomberg for many but not all stocks. The
>sum incite of this indicator on the stock market is his main claim to fame
>as an independent market analyst and institutions do pay up handsomely for
>his advise. FYI, his Money Flow calculations have kept him pretty much a
>perma bull.
>
>hope this helps,
>Rick
>Tokyo, Japan
>
>
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