Registered User
Joined: 11/16/2004
Posts: 64
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I am hesitant to use moneystream as it varies depending on screen magnification. For instance with COX and a 16 month view there is a sharp spike up on 10/26/04 in ms. But if viewed with a 4 month screen that divergence is gone.
With CFC and a 16 mo. screen on 10/22/04 ms drops like a rock. Viewing it on a 4 month screen the divergence is still there but not as pronounced as the larger view.
MS appears to be unhinged by sharp moves up or down. As above one stock looses the divergence and one keeps it when the time frame is narrowed. How does one intrepret ms under these circumstances? What is real and what is memorex?
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Administration
Joined: 10/7/2004
Posts: 31
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I assume you are referring to Cox Radio (CXR). Let me start by asking you a question. Why is it when I look at CXR on a 4-month chart the stock price appears to be at a new high, but when I look at it on a 16-month chart it isn't at a new high at all? In fact, it is much closer to a NEW LOW than it is to a new high! The answer is obviously very simple. CXR is at a new 4-month high, but not a new 16-month high.
Price is plotted on a stock chart to reflect where prices are relative to where they have been. Obviously, a price chart must be scaled accordingly to accomodate the range of prices. MoneyStream is no different. You may think the indicator is actually showing you different readings depending on whether you zoom in or zoom out on a chart, but everything remains relative. I assure you a divergence which exists between price and MoneyStream between two specific and corresponding points on a chart WILL NEVER change regardless of how much (or how little) trading history you choose to display on the chart. The only thing you ever need to be concerned with when trying to interpret MoneyStream is how it behaves RELATIVE TO PRICE. That is all -- nothing else. For example, if price goes to a new high, when compared to a previous high (when viewed together on the same chart) and MoneyStream fails to go to a new high when compared to where it was when price hit its previous high, you have a NEGATIVE DIVERGENCE....plain and simple.
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Registered User
Joined: 12/8/2004
Posts: 213
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Thank you
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