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>Robert Pisani wrote:
>
> Can anyone here tell me something about the Ichimoku Equilibrium >Diagram?
The Ichimoku ("At a Glance") Equilibrium Diagram is a classic Japanese
indicator which I first learned about when I was working in Sanyo
Securities back in 1990 (it went bankrupt along with Yamaichi 2-3 months
ago- everyone thought it was Sanyo Electronics)...
It creates a forecasted movement zone, known as the "Senko Span." This
area is considered a cloud of support or wall of resistance, depending
on whether the commodity's price is above or below it. The upper side or
limit of the cloud is calculated by using a conversion price
("tenkanchi") which is the mid range price of the last nine days' high
and low and a standard price ("kijunchi") which is the middle of the
last 26 day's high and low. Then the middle price between the conversion
price and the standard price is found. Then this price is moved 26 days
ahead of the present market price.
The bottom line of the senko span is calculated by taking the middle of
the high and low of the last 52 days and placing this 26 days ahead.
Simply, if the actual commodity price passes above the zone, it (the
zone) will become a support and this is a bullish sign. If it passes
below the zone, the zone will act as a wall of resistance.
Like any indicator, it hits and misses. Because it is mid-term, it isn't
that inaccurate. It is often applied to the Nikkei 225.
It is now available on high-end terminals such as Bloomberg.
Regards,
Wayne
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