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Well, Dan, if the information were priceless Equis would still sell
it. Most of the professional traders look at the information you are
talking about to get an idea of the momentum behind any price movement
that looks like a trend. But they look at a lot of things and use
their intuition and experience to ascertain what they are seeing.
Everything the tape did you can do in MS.
I plot all the breadth data including new highs and new lows on a
chart. Right now new highs and new lows is worthless information. Most
of the new lows come from preferred's that trade on the NYSE, and
there are only a couple of new highs everyday. When I do use the NL NH
info, I use it as a ratio against a moving average. I would say it's
semi reliable.
Sometimes I use SpyGlass (now called Fire) to do some breadth
calculations and run some custom indexes, etc. Those work well most of
the time.
Price Headley wrote about the Rydex ratios in Big Trends in Trading.
Those work pretty good. I refer to them frequently. The problem is
getting the history loaded into MS. I have several years worth, but I
don't know how far back the history goes on the Rydex website.
I also use a 5 20 MA crossover of the vix. That works pretty well.
John Clayburg in Four Steps to Trading Success describes a market open
indicator based on one minute data that predicts the overall direction
of the market for the day after the first five minutes of trading.
That one used to work about 75% of the time, but I haven't checked it
lately to see what the accuracy is in this kind of market.
Gregory Morris wrote the Complete Guide to Market Breadth Indicators.
He as everything you would ever want to know about general market data
in that book.
As far as coming up with a weighting formula based on breath
indicators and data that produces some kind of magic number that tells
you when to trade, etc., forget it.
TA is only marginally useful. In addition, every trading organization
in the world has hired mathematicians, engineers and rocket scientists
to analyze all the data known to mankind and so far they have not been
able to figure out anything that predicts the markets with any degree
of consistency. All they've been able to do is find gaps in the
markets created by inefficiencies, but that has largely been overrated.
You can see how smart wall street was exploiting interest rate spreads
as they blew themselves up and destroyed their industry.
If you want to exploit market inefficiencies, learn to trade closed
end funds with big discounts to their NAVs. That makes money based on
inefficiencies in valuations. You don't have to be a rocket scientist
to do that. Everything reverts to the mean given some time. Simple
enough. Those are easy to trade, and reasonably predictable. Several
academic papers have done looked at why closed ends trade at a
discount to NAV and how to exploit it.
Good luck finding the magic formula. I can't imagine why Equis didn't
keep the Tape program given how good all of their other stuff is at
finding those winners.
Super
--- In equismetastock@xxxxxxxxxxxxxxx, "lig4dan" <tcb4dan@xxx> wrote:
>
> I was looking through an old newsletter and learned about an old DOS
> program that Equis used to sell for $49. I contacted Jake Porter at
> Equis to ask if "The Technician" is still available. Sadly it is not.
>
> It has a "Tape" indicator that takes into account price action and
> market internals to come up with an overall rating of the market's
> technical condition. Some of the inputs are NYSE advancing and
> declining issues, new highs and lows, up and down volume, etc.
>
> It's been said that up to 80 percent of a stock's movement can be
> attributed to "the Market." This sort of breadth indicator can be
> priceless.
>
> Does anyone have a copy of this program they would like to sell? Does
> anyone know the formula for the "Tape" indicator, so that it can be
> reproduced in the current version of Metastock?
>
> I wonder if creating a "Binary Wave" indicator could replicate the
> Tape? How much weighting should be given to each of the internals?
>
> This forum has many talented technicians. Any thoughts are welcome.
> Thanks.
>
> Dan
>
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