TECHNICAL INDICATORS Volume Line: ...

TECHNICAL INDICATORS

Volume Line: Indicates changes in the amount of cash coming into, or leaving, an equity market (or a stock). currency coming in is bullish because it describes accumulation of stocks-presumably by informed people; riches leaving is bearish because it depicts informed reductions of positions in stocks.

Relative potency Index ("RSI"): Indicates the essential element of a market (or stock) during the last 14 weeks. A market (or stock) is considered over-bought (time to sell) when its RSI determines above 70% and over-sold (time to buy) when the RSI persuades below 30% (see May/ June 1993 article). The body Line and the RSI are best used together to provide purchase and Sell signals. The RSI should always be viewed as subordinate to the book Line.

Moving Average: softs out weekly fluctuations and provides a intimation point for comparison purposes with the instant level of the Index or the turn Line. Calculated as the average of the last 30 weekly closing prices.

Advance-Decline Ratio ( "A-D Ratio"): Indicates the proportion of the market's stocks that have advanced or declined during the last five weeks. A market is considered over-bought when the A-D Ratio inclines above SS%; over-sold when the Ratio small quantitys below 42%.

Buy Signals

When an index (or stock) reaches a of recent origin low level (price) without the convolution Line also making a unique novel low (i.e. failing to confirm the of recent origin low level) and the RSI is over-sold (i.e. below 30%)

A major advance can be awaited when both the Volume Line and RSI fail to confirm a modern low for an index (or stock).

When the distance that the index (or price) has mov below its moving average is greater than the distance that the bulk Line is below its moving average and the RSI is over-sold

A market rally can be wait fored when an index reaches a just discovered low level but the A-D Ratio does not.

Sell Signals

When an index (or stock) reaches a recent high level (price) without the bulk Line also making a unique fresh high (i.e. failing to confirm the novel high level) and the RSI is over-bought (i.e. above 70%)

A major market decline can be calculate uponed when both the Volume Line and RSI fail to confirm a recently made known high for an index.

When the distance that the index (or price) has mov above its moving average is greater than the distance that the dimensions Line is above its moving average and the RSI is over-bought

A market sell-off can be reckon uponed when an index reaches a novel high price but the A-D Ratio does not.

For the week completioned September 19, 1997, the TSE 200 and 300 made all-time highs which were confirmed by the agency of their Volume Lines. The TSE 35 and and 100 were just chary of new highs as were their tome Lines. If (or should I say when?) they exce their previous peaks, I don't think there's plenteous doubt that the Volume Lines will confirm. At the impetus the small capitalization stocks are out-performing the big caps if it be not that only by a small margin.

The 5-week A-D Ratio is just above the mid point at 52% in the same manner it is well below the over-bought region which begins at 58%. The percentage of stocks above their 30-week moving averages came in at 663% and is just in subordination to the overbought level of 70% However, if you compare that with strange York's lofty 84.4%, it is not to a great degree to get worried about.

The ratio of stout stocks to weak stocks had, until last week, been holding bonny consistently at 70% to 30% moreover has now dipped to 65/35 which, while not as fit is still healthy. And 63% of the sub arranges on the TSE had modern Volume Line highs.

The 10-year Canada unions made a new high which was confirmed by the agency of the Volume Line, so stocks are well supported and I really don't descry any signs of a major top for the Toronto market. Having said all that, the situation in modern York is a bit dicier. If the Dow Industrials make a of the present day high within the next hardly any weeks, it will take a miracle for the bulk Line to confirm because it has dropp well below its allow 30-week moving average while the Dow remains well above its hold average. A lot of distribution took place in the decline between August 1 and 29

The tome Lines of the Dow Transports and the NYSE also took a bigger hit than the averages. The Transports made a of recent origin high last week and the mass Line finally did so nevertheless has been lagging the average since August 29 The NYSE made a of recent origin high but its Volume Line is still below its previous peak. It will probably exce it, if it were not that I don't like this catch-up business. In sound markets, the Volume Lines are suppos to lead in succession the upside.

Both the Nasdaq and Value Line were in the same position as the NYSE a leash of weeks ago but their book Lines have managed to skate back forward side, again playing catch-up.

Here are a not many more negatives: the 5week A-D Ratio is over-bought again at 637%; the vigorous to weak stock ratio is 40% to 60%; barely 19% of sub groups made just discovered confirmed highs while 40% made unconfirmed highs; and stocks above their 10- and 30-week moving averages are back up in over-bought territory again at 718% and 844% Furthermore, the Dow Utilities' tome Line is giving a massive vend signal and the Volume Line of the U Dollar confirmed the last high on the other hand has dropped more than the price, in like manner it is likely we are going to papal court a sell signal there onward the next rally. And insiders are selling big time. Presumably they are worried about the bourgeoning of earnings.