|
PureBytes Links
Trading Reference Links
|
<x-html>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META content=text/html;charset=x-user-defined http-equiv=Content-Type><!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<META content="MSHTML 5.00.2722.2800" name=GENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY bgColor=#ffffff>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN class=200184714-27092000>Joe -
</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=200184714-27092000></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN class=200184714-27092000>I
respectfully disagree with your assertions regarding my analysis completely.
Almost the complete rise in ADX occurred during the market's rally. To say that
one day of gains and a drop in the index says that the ADX move is now
controlled by the recent bearish trend makes little sense. ADX initially fell as
prices dipped and then started to rise a tiny bit as prices fell most recently.
Yes, that does imply a weakening of the downtrend short-term, however that is
not a reason to buy for anything but a bounce.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=200184714-27092000> </SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN class=200184714-27092000>The
general rule is that when ADX moves above DI, the move is over extended.
That does not however mean that there should be reversal. The odds of a
real reversal are much higher if ADX is above 40, which it is (and was) not.
Obviously, much of the increase in ADX is due to the recent price drop, but ADX
needed time to slide from its very high level caused by the large rally over the
summer. Remember, the DIs are 14-day smoothed, then DX is smoothed by 14-days as
the ratio of the difference between DI+ and DI- over the sum of the two, then
ADX is the 14-day smoothing of that. There is nothing INCORRECT in what either
of us is saying, it is all how we interpret it. Nothing in this business is
black and white. We have the same expectations short-term
anyway.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=200184714-27092000></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN class=200184714-27092000>By the
way, ADX is again rising, and if we do fall sharply in the next couple of days,
could easily move back above DI-.</SPAN></FONT></DIV>
<DIV> </DIV>
<P><FONT size=2>---<BR>Steven W. Poser, President<BR>Poser Global Market
Strategies Inc.<BR><A href="http://www.poserglobal.com/";
target=_blank>http://www.poserglobal.com</A><BR>swp@xxxxxxxxxxxxxxx<BR>Tel:
201-995-0845<BR>Fax: 201-995-0846</FONT> </P>
<BLOCKQUOTE style="MARGIN-RIGHT: 0px">
<DIV align=left class=OutlookMessageHeader dir=ltr><FONT face=Tahoma
size=2>-----Original Message-----<BR><B>From:</B> listmanager@xxxxxxxxxxxxxxx
[mailto:listmanager@xxxxxxxxxxxxxxx]<B>On Behalf Of </B>BobR<BR><B>Sent:</B>
Wednesday, September 27, 2000 10:13 AM<BR><B>To:</B>
realtraders@xxxxxxxxxxxxxxx<BR><B>Subject:</B> [RT] General -
ADX<BR><BR></DIV></FONT>
<DIV> </DIV>
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>Joe Duffy <<A
href="mailto:joeduffy@xxxxxxxxxxxxxxxxxxxx";>joeduffy@xxxxxxxxxxxxxxxxxxxx</A>><BR><B>To:
</B>bobrabcd@xxxxxxxxxxxxx <<A
href="mailto:bobrabcd@xxxxxxxxxxxxx";>bobrabcd@xxxxxxxxxxxxx</A>><BR><B>Date:
</B>Wednesday, September 27, 2000 6:55 AM<BR><B>Subject:
</B>rt<BR><BR></DIV></FONT>
<DIV><FONT color=#0000ff size=2>
<P><FONT color=#000000 face=Arial size=3>Hi Bob:</FONT></P>
<P> </P>
<P><FONT color=#000000 face=Arial size=3>Cannot post to Real Traders. Cud u
post for me. My comments start.....</FONT></P>
<P> </P>
<P> </P>
<P><STRONG>Steve Poser wrote:</STRONG></P>
<P><STRONG>"I would not use ADX in that way at all. Note that DI- has been
above ADX almost every day since February in the Comp. The trend there has
been flat to down for the whole period. All you can say about DI- moving above
ADX is that there is risk that the current trend is extended a bit and that we
need to go sideways." </STRONG></P>
<P><STRONG>…….ACTUALLY WHAT IS MORE SIGNIFICANT IS ADX FALLING BELOW -DI as it
did 2 days ago. That’s your first sign the downtrend is
weakening.</STRONG></P>
<P><STRONG>=================================================="</STRONG></P>
<P><STRONG>However, remember that ADX is very smoothed. Most of the increase
in ADX occurred due to the rally in August/September". </STRONG></P>
<P><STRONG>……If your talking 14 period ADX this statement is not correct. ADX
rose on Tuesday’s large drop, where the low was significantly below the
previous days low indicating unequivocally ADX is reflective of the current
decline.</STRONG></P>
<P><STRONG>================================================</STRONG></P>
<P><STRONG>"If anything, right now, the indicator is telling us that we can go
sideways, but a turn down in ADX now would mean that the BULLISH cycle is
weakening, not the bearish".</STRONG></P>
<P><STRONG>……Not correct as stated above.</STRONG></P>
<P> </P><STRONG>
<P>" Furthermore, weekly ADX is near 10, saying the big picture still shows no
trend. I'd stand up and take notice when that starts moving higher. I fear
that it could be to the down side".</FONT> </STRONG></P><FONT size=2>
<P><STRONG>……That might well be true directionally on a weekly basis. As well
though, ADX readings near 10 in most market environments reflect an absence of
trend and volatility that is usually going to revert to the mean. So this is
hunting ground for potential trade ideas. </STRONG></P></FONT><FONT size=2>
<P><STRONG>On a short term basis I throw my hat in the sideways to higher
short term.</STRONG></P></FONT></DIV></BLOCKQUOTE></BODY></HTML>
</x-html>
|