posted
well if i remember correctly Ric knows stock charts. but then it was many months ago that i'm remembering from & we all know thats dangerous territory..lol
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Let me give you a new Technical Indicator to look at that really shows a lot of information with little understanding. It is sort of like RSI for ease of use but gives you good information.
Money Flow
Money flow lets you see the difference in actual money flowing into a stock vs the price per share. You are looking for opposites when looking at this to show change in direction.
So if the money flow is positive and the pps is going down it shows that new money is flowing into the stock. If money flow is negative and the pps is going up it show people are selling off or money is leaving the stock.
So what we want is a positive Money Flow with a dropping pps to show that people are starting to buy and increases in money is coming into the stock
This should be on most chart programs and a lot of big investors use this indicator.
This is from IQ Chart learning center:
Money Flow
Definition:
Money Flow is one of the more sophisticated and powerful technical indicators relating price to volume, and is calculated based in each tic during the trading day. The value increases by the shares traded on the level of an uptick, and decreased by the shares traded on the level of a downtick.
Therefore, if there is an uptick on 5,000 shares traded, money flow will increase by 5,000. If there is then a downtick on 600 shares traded, money flow will decrease by 600. If these two trades comprised the entire trading day, price would have ended even for the day, while money flow would have increased by 4,400.
Interpretation:
Signals are generated when there are divergences between the Money Flow and price.
1) When price is increasing while money is flowing out of the security, it is a warning of an impending collapse in the price of the stock. 2) When the price is trending downward while money is flowing into the security, it is a sign that some savvy buyers are accumulating the stocks.
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posted
I will be using Money flow in my TA of the stocks along with others of course. So there is the definition to help.
BTWO - Money Flow positive, pps down (looks like accumulation taking place) GOOD - but like to see money flow increase more with volume ARFR - Money flow is negative SNIO - Money flow is negitive
More later back to the game.
[ October 22, 2005, 23:09: Message edited by: Ric ]
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posted
ARFR looks like it is over sold but nothing else show much of anything and with the negative money flow it looks like a sell off on bad news. Might see a dead cat bounce though.
SNIO looks like it is over sold but again nothing else looks good and is in an overall downtrend. Its recent bounces from volume were not enough to cover the commisions.
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posted
A helpful tool, I think it shows more what it won't do then what it will. I think it can tell you when to stay away. But also it will show when one is prime to move. Whether it does or not is very hard to say in this market. And once it falls into the 4th digit then its useless.
One reason I like Money flow so much is it can show front loading if the money flow has a sharp increase. RSI is important but can be decieving when CEO's are diluting. Dilution will show up as oversold. Thats why you can't just rely on RSI as an indicator. But when all indicator show something positive then I think its at least worth looking at and doing further dd.
Fast Stoch and William R% are pretty much the same look on the chart. You don't need both
Slow Stoch is useless in the volatile penny market because its too slow an indicator
MACD to me is also a little slow for pennies but once it crosses can show that it may continue a run but is too slow to tell you when to sell.
RSI is a must. It tells you whoch ones to look at but can be decieving if you use it alone.
Money Flow is great but also needs confirmation.
Volume of course but needs confirmation.
Bolinger Bands are very useful in seeing when a stock deviates from its moving averages and when the band narrows shows possible break outs. That will be my next in depth definition.
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posted
The only reason I ask is because in my opinion, charts are a valuable tool when looking into "real" stocks. Typically I'll use Williams, RSI, and Bollinger Bands when looking for something to buy. The Williams on ARFR & SNIO reflect somewhat oversold but nothing to get excited about. Same thing with the RSI. The bands on each appear to be tightening but in my opinion, it's meaningless. I think that Will has keyed into something here with his volume indicators but it seems like if one of his picks is going to run, there's a week or two lag time. I'm wondering if after eliminating obvious dilution stocks, there might be some indicator to look at that would indicate an imminent run?
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posted
Well, I think you said it there too. I think when it is ho hum then its hard to call in this market. But the extremes, I think does help in calling when everything screams movement.
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I like it in the normal market but with the volatility in this market, I find it not as good. Because when you do a 100% run then go back to normal pps in two weeks which is common then the Price Channel goes wild. But I look at it though, just don't rely on it much without a lot of backup support.
I also have parabolic sar up just from habit in the Forex market but not as useful here as it is in other markets.
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posted
Ric, Your talking MFI not CMF,yes? Might be confusing to some unfamiliar. One thing I have found with MFI is it can and often does just beat out RSI in a break out - it's like the buying on the ask indicator, sometimes you can see it turn up before almost anything else does - bit of an edge if you play it right.
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quote:I still showing ARFR negative with a little drop Friday. The number did go up but it was a negative number.
I've got it at .10 or so but either way, Will identifies strange volume based on historical data. As I said earlier, some are simply dilution but some of these really run but they seem to take a week or two. What indicators can we use to determine if it's for real? Money flow is going to go positive whether it's dilution or not, same with the indicators I use. What are we missing here? There's got to be some indicator that signifies it's for real, wouldn't you think?
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posted
Sorry livin, answered that question to quick. I use MFI but was not talking about MFI. The index is a good indicator like you said but I was actually talking about Money Flow not money flow index. Money flow charts actual dollar amount flowing in or out not percentages in an index as MFI or CMF.
Example of Money flow: (not Money Flow Index)
BTWO 18 thousand dollars positive flow ARFR -131 thousand negative flow of money SNIO -84 thousand negative flow of money
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posted
Well no matter what, Money Flow is a very good companion to Volume.
Because it shows whether it is being accumulated or being sold off during the volume spikes. And those with increased volume with negative money flow is a sell off. And those with increased volume with positive money flow is accumulation no matter what the cause.
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BTWO the bolinger bands are narrowing, getting closer together. This is important because it gives rise to a potential breakout.
------------------------------------------- Mr. Bollinger contends that:
Sharp moves tend to occur after the bands tighten to the average, when a stock is less volatile. The greater the period of less volatility, the higher the propensity for a price breakout.
--------------------------------------------
Also since the pps is riding on the bottom of the bolinger band then it is confirming that the pps is near or at bottom.
Mr. Bollinger also contends that:
When the price hits the upper or lower bands, it is suggested to confirm with other indicators whether that price movement shows strength or weakness, respectively, which could indicate a continuation. If indicators do not confirm this movement, it can suggest a reversal.
Tops or bottoms made outside the bands, followed by the same inside the bands, indicate a trend reversal.
A move originating at one band tends to go to the other band.
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posted
BTWO the William %R is oversold. It is at the lowest it can go.
Williams %R
Definition:
The main concept of Williams' %R is "gravitation towards the mean." If within a given time period, the price is near the high end of a period's range, the security tends to be overbought, and is vulnerable for a selloff. Conversely, if the price is near the low end of a period's range a potential rally is could occur due to oversold market conditions.
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posted
BTWO's MACD is a concern with this stock. The lines are really riding each other and very tight. This show that there hasn't been much volitility with this stock. That even in times of oversold or overbought in the past that the movement in the oposite direction hasn't been that much.
Moving Average Convergence/Divergence
Definition:
Moving Average Convergence and Divergence (MACD) is the difference between a fast exponential moving average (fast EMA) and a slow exponential moving average (slow EMA).
One interpretation is that a positive MACD value is a bullish signal, and a negative MACD value is a bearish signal.
The crossover interpretation posits that the signal line can be used alongside the MACD to determine the appropriate entry and exit point.
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