posted
Supply and Demand - That is the stock market.
Technically speaking is there a way that we can track how many shares are left in the supply of a stock? I mean literally, how many shares are left to be bought? It could be extremely important to find the stocks in their consolidation stage waiting for either the supply to lower or demand to rise. I understand what Willms %R and RSI are and that they measure oversold/overbought, but are they really?
Here is the definition of the Williams %R and RSI from investopedia.
Williams %R - In technical analysis, this is a momentum indicator measuring overbought and oversold levels, similar to a stochastic oscillator. It was developed by Larry Williams and compares a stock's close to the high-low range over a certain period of time, usually 14 days.
RSI - A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It is calculated using the following formula: RSI = 100 - 100 ______ 1 + RS
RS = Average of x days' up closes / Average of x days' down closes
A trader using RSI should be aware that large surges and drops in the price of an asset will affect the RSI by creating false buy or sell signals. The RSI is best used as a valuable complement to other stock-picking tools.
What happens with these tools? As a stock rises it approaches a more overbought state. On the contrary, if a stock is rising in price still it would indicate that there is still a greater demand than supply. If the price levels off and then declines the stock should actually be more oversold yes? There is more supply then demand at that point. Yet the Williams %R and RSI are still in overbought states. That doesn't make entire sense to me coming from a more economical view.
Thus, my question is if there is a tool that more directly measures how many more shares are being bought that time period than being sold. Thus it can be positive or negative. I imagine that price is not factored into the equation at all, just volume.
The Williams %R has a positive and negative scale and would thus be closest to what I'm looking for, but it takes prices into consideration. Price shouldn't matter, only volume of shares.
Maybe I'm forgetting about some other tool or maybe I'm asking for too much. It just hit me that all we really need to know is supply and demand. Matt
Posts: 1504 | Registered: Sep 2004
| IP: Logged |
posted
seems like you could work off MM monthly positions, then track by T&S reports daily. But you'd still have only a guesttimate--i mean, look at the "slop" in DTC reports. FTDs. etc...
Shoot, I'd like a good, reliable daily T&S report, not merely transactions but buys vs sells
In pennies, though, the only reason we have supply/demand is MMs...iow, knowing X was bought or sold is one factor, but we still don't whether a trader bought/sold, or an MM...
posted
Nm, I'm an idiot. I imagine the stock market would be too easy if we had that information. Using the current indicators is all we can use to guesstimate the supply that is left. Matt
Posts: 1504 | Registered: Sep 2004
| IP: Logged |
UBBFriend: Email this page to someone!
Printer-friendly view of this topic
