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To show that volume does play a part and does not washout run this simple 3
datapoint exercise once when volume is not equal to 1 and again when volume
is equal to 1 then compare the final CPV/CV. Substituting 1 for volume will
give a support line but it won't be the same as if there were volume.
Admittedly this concept bothered me a few years ago until I ran this simple
math exercise. I.e. the cumulative volumes do not cancel out in
C(P*V)/C(V).
Case1 Volume not equal to 1:
P1 = 10, V1=2, P*V=20, V=2, CPV/CV=20/2=10
P2 = 12, V2=3, P*V=36 AND CPV=20+36=56 AND CV=2+3=5, CPV/CV=56/5=11.2
P3 = 14, V3=5, P*V=70 AND CPV=56+70=126 AND CV = 5+5=10, CPV/CV=126/10=12.6
CASE2 V=1 and same prices as in Case1:
P1=10,V1=1, P*V=10, V=1, CPV/CV=10/1=10
P2=12,V2=1, P*V=12, AND CPV=10+12=22 AND CV=1+1=2 AND CPV/CV=22/2=11
P3=14,V3=1, P*V=14, AND CPV=22+14=36 AND CV=2+1=3 AND CPV/CV=36/3=12
Case1 CPV/CV=12.6
Case2 CPV/CV=12.0
bobr
----- Original Message -----
From: "Prosper" <brente@xxxxxxxxxxxx>
To: "Real Traders" <realtraders@xxxxxxxxxxxxxxx>
Sent: Sunday, June 24, 2001 1:46 PM
Subject: Re: [RT] Mkt - DJIA WM view
> Bob et al,
>
> I forgot to say that for some reason I can't open the second .gif that you
> posted. I am trying to open it from the yahoo site because I get the
digest.
>
> Maybe the way to test it in Lotus would be to replace the volume part with
> either 1 or with the closing value and see if it invalidates the results.
>
> As I was telling Clyde, it may well be that the concept of a
> plot configured the WM way is a logical line of S&R that the markets must
> retest. The part that doesn't seem to ring true to me is the volume having
> anything to do with it. Still, it is one of those, if it works, use it,
type
> of things.
>
> If someone can show that I am incorrect about the volume, I will be happy
to
> agree.
>
> Prosper
>
>
>
> To unsubscribe from this group, send an email to:
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>
>
>
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>
>
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