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Dear Ron:
If you look at the AD Line on NASDAQ from the moment of NASDAQ inception it
ALWAYS moved only in ONLY one direction DOWN! NASDAQ went through great
bull markets and great bear markets, multiplied the stock values many times
over, and AD line continue to move in the same direction DOWN. AD line
never made a "new high" mining that the value on the day 1 was never exceeded.
Why is that? The NASDAQ contain many "greatest" companies that are not
"recognized" and are not "appreciated" by the investment public. Do not
blame the public for their blindness. The problem is that many of those
"greatest" companies go out of business (and disappear forever) before the
investors have the chance to recognize them. The price of the stock of
disappearing company has to decline before the company is de listed. Gone
away companies are replaced by equally "great" companies and so on. That is
why NASDAQ AD line is always going DOWN.
Does it mean that you can not use AD line to help you analyze the NASDAQ?
No, you should use it, you must use it, but you need to learn how.
With the best wishes.
Faint hearted Alex.
At 11:37 PM 8/26/99 -0400, Ronald McEwan wrote:
>The attached chart should not be veiled by anybody with a heart
>condition, or even worse, by anybody with substantial long positions in
>NASDAQ Stocks.
>
>Ron McEwan
>
>
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