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<DIV><FONT face=Arial size=2>For those interested in the MIDAS methodology,
below is the TS 4.0 easylanguage code. This deserves some
attention.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>var: cumpv(1), cumv(1),MIDAS((H+L)/2);<BR>input:
stdate(currentdate);<BR>{Enter start date in yymmdd format.}<BR>If date >=
stdate then begin<BR>cumpv= LOW*V+cumpv[1];<BR>cumv= v+cumv[1];</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><BR>if date>= stdate then </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><BR>MIDAS =
cumpv/cumv;<BR>plot1(MIDAS,"MDS");<BR>end;</FONT></DIV>
<DIV><FONT face=Arial size=2>Jim White<BR>PIVOT Research & Trading
Co.</FONT></DIV></BODY></HTML>
</x-html>From ???@??? Wed Nov 03 20:00:26 1999
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Message-ID: <02a101bf2600$65e364c0$292a42cf@xxxxxx>
From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxx>
References: <000901bf258a$e46370e0$790bfad1@xxxx> <010b01bf25a1$9ec55c80$292a42cf@xxxxxx> <006801bf25b4$eb4d0ea0$0d221b3f@xxxxxxxxx>
Subject: Re: A/D Line and history
Date: Wed, 3 Nov 1999 06:35:12 -0700
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Status:
The A/D line is abused and misused by bulls and bears alike. The A/D line is
simply not intended or suitable for comparison over the entire history of a
market, this is where A/D oscillators, such as the McClellan Oscillator,
should be used. The A/D line itself is suitable for use in comparison with
major price swings and the objective is to see if the breadth of the market
indicates a healthy move or a selective move - this applies to both bull and
bear markets. Generally, poor breadth in a declining market indicates the
market is gaining health (a smaller percentage of the patients are sick) and
poor breadth in a rallying market indicates the market is losing health (a
high percentage of the patients are sick). When there is an epidemic,
betting on the last few survivors, may be entertaining for the gamblers, but
is probably not the wisest investment. Likewise, when the patients are all
gaining health, betting on funerals for everyone is a suckers bet.
I don't make much use of the A/D line, preferring oscillators, however the
A/D line did tell us for over a year from the 98 highs, that the market was
not healthy and the vast majority of stocks, excepting a few favorites, have
declined 20%-40%. We now have a series of lower lows in place in the major
averages and a strong rally is underway. It is time to reset the A/D line
and see how it performs as prices move higher. My breadth oscillators are
currently booming on all cylinders and seasonally is quite favorable. Only
the interest rate picture remains unfavorable and Zweig's work very well
details the high correlation of equity markets with interest rates.
Finally, I also end with a quote from the days of yore: "those who fail to
learn from history are destined to repeat it". History tells that the
terminus of bull markets generally sees the favorite stocks suddenly swoon
with relatively little advance warning on the tape - one day the buying just
stops and the selling begins. This is of little or no consequence to the
trader, however it is of major consequence to investors. I think the
attached (log scale) chart states the case far more eloquently than words. I
will note that the initial 40% decline took place in only 6 weeks in an age
which lacked the accoutrements of modern computing and communications.
Earl (who prefers to invest in inexpensive assets and trade whatever offers
opportunity)
----- Original Message -----
From: Gitanshu Buch <OnWingsOfEagles@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxx>
Sent: Tuesday, November 02, 1999 9:35 PM
Subject: Re: A/D Line and history
> For those who wonder, the cumulative AD line peaked on Feb 27, 1959 at
> 35.579 and has yet to break or even come anywhere near that high. Accurate
> aggregate data goes back to 1931 as NYSE would attest Simply adding day 1
> to day 2, adding day 3 to the result, and so on.
>
> By this measure, the A/D line bottomed on 12/31/74 at -90,541.
>
> On November 2, 1999 we find ourselves nowhere near either extreme.
> If the market is constantly discounting the future, then the tape says we
> remain in a bull market well into Calendar 2000. If the market anticipated
a
> 5 year top, the tape would have telegraphed that message many months ago.
>
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