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The PREM itself is very erratic, but you can find some good divergences by
plotting Bollinger Bands around the Spread between the PREM & SPX. Curve is
better analyzed if normalized in a 0-100 channel
(following code is crude)
Input: Length(20);
Vars : MidAvg(0);
Value5 = ((H of Data1 + L of Data1 + C of Data1) / 3 ); { SPX }
Value6 = ((H of Data2 + L of Data2 + C of data2) / 3 ); { PREM }
Value7 = ( Value5 + Value6 ) - Value5; { PREM - SPX
Spread }
Value1 = BollingerBand(Value7,Length,+2);
Value2 = BollingerBand(Value7,Length,-2);
MidAvg = Average(value7,Length);
Plot1(Value1,"BollTop");
Plot2(MidAvg,"MidAvg");
Plot3(Value2,"BollBot");
Plot4(Value7,"RawSpread");
______________________________________
At 06:36 PM 10/7/98 -0700, you wrote:
>Hi all,
>
>Just wondering if anyone out there is using PREM as a short term
>indicator for daytrading? I'd be interested in hearing your thoughts on
>interperetation, if you want to share them...
>
>Thanx in advance,
>
>Dave
>
>
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