Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] semi-log DGO?
Date: Fri, 31 May 2002 14:12:15 -0500
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Hi jans,
I'm getting better at this...I vaguely remembered something at =
Investors.com about the arithmetic v. log scale issue, and sure enough, =
here it is:
Question:
To correctly identify a winning chart pattern, should we look at a =
logarithmic scale or an arithmetic scale chart? A pattern may look a lot =
different depending on which type of scale you use.
Answer:
When using a daily chart, an arithmetic scale chart (in which the =
vertical axis denoting a stock's price shows equal spacing between each =
unit of price) is fine. For example, a flat base will appear as a tight =
formation on either the linear or the log scale chart. More importantly, =
check to see that the percentage price change between the high and the =
low of the base fits the parameters of the base it portrays. In a good =
flat base, the stock should never fall more than 10-15 percent below the =
peak in the base. In a weekly chart, a logarithmic chart has a couple of =
advantages. If a stock falls from, say, 200 to 100, the depth of the =
drop will look the same as one that falls from 40 to 20. In both cases, =
the stock has dropped 50 percent. Also on a log chart, you can more =
clearly see when a stock is rising fast or too fast in price. If a stock =
rises 50 percent or more in just a week, it will look more dramatic on a =
log chart than on an arithmetic chart. Such climax runs following =
previous big gains often signal the stock's top.
- --Katherine
----- Original Message -----=20
From: Spencer48@aol.com=20
To: canslim@lists.xmission.com=20
Sent: Friday, May 31, 2002 1:16 PM
Subject: Re: [CANSLIM] semi-log DGO?
Katherine:
DGO really does it this way: using arithmetic scales for the Day; =
and=20
semi-log for the week!? =20
It's asking those of us who analyze charts using the Canslim =
method of=20
using PP. BO's, C&H and Double Bottom formations to logically evaluate =
different items on the same scale. For instance, if the price of a =
stock is=20
high, a flat base will look flat on a semi-log where it wouldn't in an =
arithmetic.
Does the DGOnline method make any sense to you? Tom? Anyone?
jans
In a message dated 5/31/2002 8:57:20 AM Eastern Daylight Time,=20
kmalm@earthlink.net writes:
<< Hi Dave,
The numeric interval is based on arithmetic scaling for daily and =
intraday=20
charts, and logarithmic scaling for weekly charts. >>
-
-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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<META http-equiv=3DContent-Type content=3D"text/html; =
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<BODY bgColor=3D#ffffff>
<DIV>Hi jans,</DIV>
<DIV> </DIV>
<DIV>I'm getting better at this...I vaguely remembered something at=20
Investors.com about the arithmetic v. log scale issue, and sure enough, =
here it=20
is:</DIV>
<DIV> </DIV>
<DIV>Question:</DIV>
<DIV>To correctly identify a winning chart pattern, should we look at a=20
logarithmic scale or an arithmetic scale chart? A pattern may look a lot =
different depending on which type of scale you use.</DIV>
<DIV>Answer:</DIV>
<DIV>When using a daily chart, an arithmetic scale chart (in which the =
vertical=20
axis denoting a stock's price shows equal spacing between each unit of =
price) is=20
fine. For example, a flat base will appear as a tight formation on =
either the=20
linear or the log scale chart. More importantly, check to see that the=20
percentage price change between the high and the low of the base fits =
the=20
parameters of the base it portrays. In a good flat base, the stock =
should never=20
fall more than 10-15 percent below the peak in the base. In a weekly =
chart, a=20
logarithmic chart has a couple of advantages. If a stock falls from, =
say, 200 to=20
100, the depth of the drop will look the same as one that falls from 40 =
to 20.=20
In both cases, the stock has dropped 50 percent. Also on a log chart, =
you can=20
more clearly see when a stock is rising fast or too fast in price. If a =
stock=20
rises 50 percent or more in just a week, it will look more dramatic on a =
log=20
chart than on an arithmetic chart. Such climax runs following previous =
big gains=20
often signal the stock's top.<BR></DIV>
<DIV> </DIV>
<DIV>--Katherine</DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3DSpencer48@aol.com=20
href=3D"mailto:Spencer48@aol.com">Spencer48@aol.com</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, May 31, 2002 1:16 =
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] semi-log =
DGO?</DIV>
<DIV><BR></DIV>Katherine:<BR><BR> DGO really =
does it=20
this way: using arithmetic scales for the Day; and <BR>semi-log for =
the=20
week!? <BR><BR> It's asking those of us =
who=20
analyze charts using the Canslim method of <BR>using PP. BO's, C&H =
and=20
Double Bottom formations to logically evaluate <BR>different items on =
the same=20
scale. For instance, if the price of a stock is <BR>high, a flat =
base=20
will look flat on a semi-log where it wouldn't in an=20
<BR>arithmetic.<BR><BR> Does the DGOnline =
method make=20
any sense to you? Tom? Anyone?<BR><BR>jans<BR><BR><BR>In a =
message=20
dated 5/31/2002 8:57:20 AM Eastern Daylight Time, <BR><A=20
href=3D"mailto:kmalm@earthlink.net">kmalm@earthlink.net</A>=20
writes:<BR><BR><< Hi Dave,<BR> The numeric interval =
is based=20
on arithmetic scaling for daily and intraday <BR>charts, and =
logarithmic=20
scaling for weekly charts. >><BR><BR>-<BR>-To =
subscribe/unsubscribe,=20
email "<A=20
=
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In=
the=20
email body, write "subscribe canslim" or<BR>-"unsubscribe =
canslim". Do=20
not use quotes in your email.</BLOCKQUOTE></BODY></HTML>
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