RE: [CANSLIM] U/D algorithm

From: Eric Jaenike <ericjaenike@yahoo.com>
Subject: RE: [CANSLIM] U/D algorithm
Date: Thu, 16 Jan 2003 09:15:27 -0800 (PST)
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Thanks. Chaikin MF also has issues (as do all indicators, which is why the derivation needs to be understood, and why there is no substitute for eyeballing a chart, IMO). One of Chaikin's big problems, of course, comes with gaps.
Eric
 Katherine Malm <kmalm@earthlink.net> wrote:Hi Eric, The U/D ratio is very simple and so has it's peculiar drawbacks, among which single big up or down days can distort the measure fairly easily. Like most technical indicators, it's just a quick way of summarizing what you can see in the Price/Volume action itself:  U/D Definition: A 50-day ratio that is derived by dividing total volume on up days by the total volume on down days. A ratio greater than 1.0 implies positive demand for a stock. My understanding of Chaikin Money Flow (and his associated Accum/Distribution metric) is that it is much closer to IBD's A/D reading, as it looks at the closes relative to the day's range to determine buying/selling pressure. Katherine-----Original Message-----
From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Eric Jaenike
Sent: Thursday, January 16, 2003 10:42 AM
To: canslim group
Subject: [CANSLIM] U/D algorithm


I've been comparing the U/D ratio used by IBD to Chaikin Money Flow. Does anyone have any info on the algorithm for U/D, or whether its an open/closed indicator, etc?

Thanks,

Eric



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<P>Thanks. Chaikin MF also has issues (as do all indicators, which is why the derivation needs to be understood, and why there is no substitute for eyeballing a chart, IMO). One of Chaikin's big problems, of course, comes with gaps.
<P>Eric
<P>&nbsp;<B><I>Katherine Malm &lt;kmalm@earthlink.net&gt;</I></B> wrote:
<BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid">
<META content="MSHTML 6.00.2800.1126" name=GENERATOR>
<DIV><SPAN class=156395916-16012003>Hi Eric,</SPAN></DIV>
<DIV><SPAN class=156395916-16012003></SPAN>&nbsp;</DIV>
<DIV><SPAN class=156395916-16012003>The U/D ratio is very simple and so has it's peculiar drawbacks, among which single big up or down days can distort the measure fairly easily. Like most technical indicators, it's just a quick way of summarizing what you can see in the Price/Volume action itself:</SPAN></DIV>
<DIV><SPAN class=156395916-16012003></SPAN>&nbsp;</DIV>
<DIV><SPAN class=156395916-16012003><FONT size=2>&nbsp;</FONT><FONT size=3>U/D Definition: A 50-day ratio that is derived by dividing total volume on up days by the total volume on down days. A ratio greater than 1.0 implies positive demand for a stock.</FONT></SPAN></DIV>
<DIV><SPAN class=156395916-16012003></SPAN>&nbsp;</DIV>
<DIV><SPAN class=156395916-16012003>My understanding of Chaikin Money Flow (and his associated Accum/Distribution metric) is that it is much closer to IBD's A/D reading, as it looks at the closes relative to the day's range to determine buying/selling pressure.</SPAN></DIV>
<DIV><SPAN class=156395916-16012003></SPAN>&nbsp;</DIV>
<DIV><SPAN class=156395916-16012003>Katherine</SPAN></DIV>
<BLOCKQUOTE>
<DIV class=OutlookMessageHeader dir=ltr align=left><FONT face=Tahoma size=2>-----Original Message-----<BR><B>From:</B> owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Eric Jaenike<BR><B>Sent:</B> Thursday, January 16, 2003 10:42 AM<BR><B>To:</B> canslim group<BR><B>Subject:</B> [CANSLIM] U/D algorithm<BR><BR></FONT></DIV>
<P>I've been comparing the U/D ratio used by IBD to Chaikin Money Flow. Does anyone have any info on the algorithm for U/D, or whether its an open/closed indicator, etc?</P>
<P>Thanks,</P>
<P>Eric</P>
<P><BR>
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