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mortiz

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Reply with quote  #1 

Although Monday, 8-28-06, the NYSE composite AD line made a nominal new high, today's action resulted in that new high being a decisive one.  The common AD line is a whole different story... more on that later.

 

 

FWIW

 

Randy

 

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fib_1618

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Reply with quote  #2 
Indeed....we look forward to your further comments Randy.

Fib






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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

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da_cheif

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Reply with quote  #3 
do yourself a favor....eliminate the daily ad line from ur repertoir of technical tools......it has nothing to do with amplitude......i can show you where and how it can disintegrate while the nyse goes nuts on the upside......the weekly ad line is the only breadth indicator that has value.......this is not just my opinion but the truth from 30 years of observation and working with it...... 
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fib_1618

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Reply with quote  #4 
Quote:
eliminate the daily ad line from ur repertoire of technical tools......it has nothing to do with amplitude......i can show you where and how it can disintegrate while the NYSE goes nuts on the upside......the weekly ad line is the only breadth indicator that has value

Sorry Don, but I will have to respectively disagree with your statement here.

The weekly NYAD data might have the value you're looking for in your work, but on a longer term basis, there is very little difference between that of the daily time frame and that of the weekly as the first two comparison charts of the last 16 years distinctively show below.

And as far as amplitude is concerned, the last two comparison charts provide one of many instances in which this statement is not consistent....where the daily NYAD provided bear divergence with the recent price top made in May, while if you allowed the weekly chart to be your guide, you would have participated in the ensuing decline that followed into the July lows and wondering "what happened?".

Just a matter of context, I guess, as we're both on the same page, but the bottom line is that the weekly data does give you a good feel of the longer term trend of money flow, while the daily gives you an opportunity to...well..."micromanage" this same longer term trend...very much like the different time parameters you use with the CLX, or even when comparing everyday price bar charts.

Fib














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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

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mortiz

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Reply with quote  #5 

My two cents on the weekly versus daily composite NYSE cumulative AD line data, is both are useful, they provide insights into different time frames... and as always, we can agree to disagree.  Fib's presentation illustrates the similarities between the weekly and daily charts, so back to the current configuration of the common AD line.

 

The NYSE composite AD line encompasses the action of some 3650 issues, a little over 2000 of those issues being common stocks, which make up on average, 97% of the trading volume on the NYSE.  There are a little over 1100 preferred stocks and bond CEFs traded on the NYSE, which on a good day, account for 15 million shares traded.  As Fib has been illustrating for several weeks in his breadth updates, the preferred stock and bond CEF cumulative AD lines have been achieving new highs.

 

IMHO, due to the the majority of the NYSE volume being concentrated in the common stocks, it is worthwhile monitoring the liquidity state of those 2000+ issues.  The below chart zooms in on the common AD line over the past year.  As is evident, the common AD line is struggling to remain above its 1% trend (199 EMA), but has managed to remain above its respective 5% and 10% trends.  The common stock AD line 5% and 10% trends are now converging meaning the common AD McSum has finally reached zero after posting a low of around -750 in June.

 

 

The common weekly AD line data only goes back five years since I know of no source that derives the common weekly data, so this derived series is limited to the data at my disposal allowing the weekly derivation.  This chart illustrates the action through Friday, 8-25-06.  Compare this AD line to the weekly composite AD line Fib posted previously.

 

 

Both the common only and composite AD variants are very useful, but I have found in my experience of monitoring AD indicators from both versions, prices do best when both the common and composite are moving in lock step, something the two groups have yet to achieve this summer.

 

FWIW

 

Randy

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da_cheif

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Reply with quote  #6 

I dont know where that data feed gets its info.....but the weekly ad line of the primary market ist well above its last peak......look at both ur charts.......ur weekly and daily are the same......its just ur weekly is  a dailly chart compressed to take in more time......think about it.......a stock goes up 3 pts on monday.....then gives up an eighth of a point on tues wed thur friday.....then up 4 pts on monday....then down fractionally everyday till friday..........now you can see where the dailly ad line collapses but the weekly ad line is screaming........if you go to any chart book you can view this phenom at work......strait up for a day or so.....then a long period of consolidation  before the next quick ramp.......I like you spent a long time keeping track of ad lines......then the lite bulb went off.......snort

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mortiz

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Reply with quote  #7 

The below chart's NYSE composite weekly AD data comes from Barrons, and as cheif notes, the weekly AD line achieved an all-time new high the week ending 8-4-06, and has climbed higher since.  This chart encompasses the trading action through 8-25-06.

 

 

FWIW

 

Randy

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dstuart

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Reply with quote  #8 

From your perspective then Randy which A/D line is more predictive of the stock market going forward; the weekly composite or the commons only weekly?

Thanks

 

Dennis

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mortiz

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Reply with quote  #9 

Hi Dennis,

 

Since the weekly common only AD data is available (at least for me) from late 2001, it is not a certainty is has always behaved basically like the daily common AD data.  However, since late 2001 the daily and weekly common AD numbers do exhibit a very positive correlation so one could assume the same correlation is present prior to 2001.

 

Since the daily common AD data is available from the 1980 time frame, IMHO (cheif won't agree with this), the common AD is more useful.  At the 2002-03 price bottoms, the composite weekly AD data was continuing its move north, as it had for the prior two years.  In contrast, the common AD data was shadowing prices and bottomed in March 2003.

 

Thus, I believe the commons give a truer reflection of what prices are actually doing for the vehicles I trade (common stocks and indices).

 

Randy

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