Go to Jeff Salisbury LWGate Home Page.From: "Cefaloni, John L Jr. [AMSTA-AR-WEA]" <john.cefaloni@us.army.mil>
Subject: FW: OFF LIST [CANSLIM] MACD-Hist of NASDAQ
Date: Sat, 6 Apr 2002 08:18:11 -0500
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Oh boy, a message from November? I knew if I shot off my mouth that it would eventually catch up to me! Seriously, I too have noticed that using different parameters in TA formulas can give you different results. I thought that Elder discussed this in his book, but I may be wrong (cursed memory). I think that there are similar "gray areas" in chart reading. There seems to often be more than one answer in trying to identify pivot points, support/resistance areas, formations like flags and even cups and handles. With respect to MACD-Hist parameters (and other TA parameters, even simple moving averages), I try to use what makes sense. If certain numbers show a divergence, did the price follow the indicator? If not, it may be the wrong indicator. Some stocks hug the 50 DMA religiously and some seem to pay no attention to it. Sometimes, I'll just punch in differnt MA's, like "37", just to see if it makes sense for that particular stock. The same goes true for using linear or log scales when chart reading, and looking at daily versus weekly prices. The right combination might make something jump out at you and if those parameters match the price action for that stock, I try to stick with it. JMHO, hope it helps. John C. - -----Original Message----- From: walter nusbaum To: cefaloni@pica.army.mil Sent: 4/5/02 5:50 PM Subject: Re:OFF LIST [CANSLIM] MACD-Hist of NASDAQ Hi John, I was going through some old CANSLIM stuff and I ran across your note below. I had the same experience with mystical divergences, having picked it up from Elder's book. I started looking for them and they were all over the place. According to Elder, this was supposed to be "rare". Well, after thinking about the construction of the histogram, it occurred to me to change the first two ma's, and lo-and-behold, the divergences disappeared. I could even make them re-appear. I wrote to Elder about an error in his book(A graph had been labeled incorrectly), but didn't receive a reply, so I don't think I'm gonna ask him about this "problem". I mean, how do you know when you have a bona fide diversion if you can make one happen, or go away? I'm still working on this. They seem to be more prevalent on the shorter term ma's. If you have any ideas, I'd appreciate hearing them. Thanks. Best wishes, Walt - ----- Original Message ----- From: "Cefaloni, John L Jr. [AMSTA-AR-WEA]" <cefaloni@pica.army.mil> To: <canslim@lists.xmission.com> Sent: Friday, November 09, 2001 6:45 AM Subject: [CANSLIM] MACD-Hist of NASDAQ > Okay, let's see if this stuff works again. I put up a chart of the NASDAQ > this morning and I think I see a similar bearish divergence pattern to the > one I saw in TARO a few days ago. Please don't trust me on this - look at > it yourself and verify what I see. > > This time I see four successively higher peaks in the index on Oct 12, Oct > 16/17, Oct 26 and Nov 7 and in each case the corresponding MACD-HIST makes > lower and lower peaks. > > I am trying to weigh this against the fact that the NASDAQ appears to have > broken above the downtrend line it has formed since topping in March 00, > plus the fact that we are in November, which is historically a good month > for the markets. > > But the pattern I see now is not new. I also see a similar pattern in the > NASDAQ in the summer of 2000, when it made successively higher peaks on June > 7/8, June 21 and July 17 with successively lower peaks in the MACD-Hist. > The NASDAQ then went from a high of 4289 on July 17 to a low of 3521 on Aug > 3. Pretty much a steady drop of almost 20%. > > I've also looked at the S&P 500, the DJIA, QQQ, and CSCO for confirmation. > A similar pattern appears. > > I'm not trying to scare anyone out of the markets. I did not profit off the > move in TARO. You people are too smart to just act on something you see off > the internet anyway. I just offer this as my observations and urge you to > check it yourself if interested. > > John C. (Snip) - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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