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In a message dated 10/15/98 9:26:54 AM, trade_jack@xxxxxxxxx writes:
<<but why do many authors, including Kaufman, Blau, even Chuck LeBeau
(in his book), claim that momentum (and indirectly acceleration) are
"leading" indicators? bob fulks also argued that under some
conditions, momentum can be a "leading" indicator, as well as a
"lagging" indicator. and isn't your "vel" thingy a "coincident
indicator."
what am i missing here? is it just a question of semantics and all
indicators are lagging, or some lag less than others?
>>
I think the reason that momentum is sometimes considered to be a leading
indicator is that it often changes direction in advance of price while other
oscillators merely follow the direction of price. This characteristic of
momentum makes it a lead indicator in its application. I would certainly
agree with anyone who wanted to argue that mathematically it is not a lead
indicator but if it serves this purpose (and many claim that it does) who
cares.
There obviously are no true lead indicators. Wish there were.
Chuck
http://traderclub.com/
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