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Registered User
Joined: 6/6/2005
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For the ticker TELK, the June BOP showing strong buying sign, but TSV is below the zero line, how do you understand if this is a buying action or selling? Do you think the TSV will climb up over the zero line? Thank. Qing
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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I think one of the Wordens would be best qualified to answer this. Let me see if I can ask one of them to swing by.
- Craig
Here to Help!
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Registered User
Joined: 1/1/2005
Posts: 2,645
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Qing,
It appears that you are asking what TSV is going to do. You probably should be asking what TSV is telling you about what price is going to do. On the otherhand, if BOP is telling you that price is going to move up to the $16 tO $17 range, and that actually happens, then TSV18 Simple will almost surely turn positive.
Let us suppose that prices stay flat and volume quite moderate for the next three weeks. Then, TSV18 Simple today began a steady increase which will continue. Monday will be a nice increase comparable to today. The following table gives the projected changes for TSV18 Simple:
,,M,,T,,W,,T,,F,,M,,T
,++,,-,,+,,+,,-,++,,+
By that time, TSV18 Simple should be close to turning positive and a slight rise will continue. Of course, if prices turn down significantly from here, the rise in TSV18 Simple will not occur.
If the above conditions on price and volume transpire, at some point you will have what would appear to be a nice positive TSV divergence. How should that be interpreted? Since we are able to predict it so easily, we should interpret it as a non-event.
The above is not at all intended to point out a problem with TSV; it just illustrates the notoriously bad behavior of a Simple Moving Average.
Thanks,
Jim Murphy
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Administration
Joined: 10/7/2004
Posts: 31
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QUOTE (qingliz6) For the ticker TELK, the June BOP showing strong buying sign, but TSV is below the zero line, how do you understand if this is a buying action or selling? Do you think the TSV will climb up over the zero line? Thank. Qing
Qing, I believe this to be a simple case of conflicting indicators. This kind of thing happens quite frequently and should typically be dealt with by simply pressing your space bar and moving on to the next stock in your WatchList.
This being said, here is my current analysis of TELK in a nutshell. First off, let me say that Balance of Power (BOP) is an indicator that I rely on considerably less than TSV and MoneyStream (MS). I find that BOP tends to be more ambiguous on a greater number of stocks. I’m not saying BOP isn’t a valid indicator. I’m only saying it seems to work reliably on a fewer number of stocks than TSV and MS.
Interestingly enough, TELK appears to be a stock where BOP has worked with at least some degree of reliability in the past. The recent BOP buying (green activity) may be an indication that some systematic accumulation has been taking place. For what it’s worth, this may suggest that a tradable low is in place. In fact, the stock has moved up slightly over the past two sessions, but let’s not get too far ahead of ourselves. Based on what TSV and MS are showing us on both a short- and longer-term basis, there is no getting around the fact TELK is an extremely weak stock in a confirmed downtrend. And like BOP, TSV and MS have proven to be reliable in offering technical clues with this particular stock (TELK) in the past.
Is BOP telling us TELK is nearing a bottom? Well, maybe, but acting on this at such an early juncture without more supporting evidence from TSV and MS in my humble opinion would be foolhardy. You would only be guessing and I certainly don’t see the odds as being in your favor. And isn’t that really the primary objective...to put the odds in your favor?
Best regards,
Peter Worden
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Registered User
Joined: 1/1/2005
Posts: 2,645
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The predicted behavior of TSV18 Simple is right on track but the extremely large increase today, 06/16/05, was not part of the prediction. It is due primarily to the new historical high of TSV1. TSV18 should cross zero on Monday baring a large downturn in Price.
Too bad we cannot trade TSV18 Simple. Again, this is not a problem with TSV, it is a problem with a Simple Moving Average.
Thanks,
Jim Murphy
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Registered User
Joined: 1/1/2005
Posts: 2,645
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Due to the recent Price Volume action, TSV18 Simple has moved above the zero line much more aggressively than its predictable component would indicate. The predictable portion of TSV18 moves up gradually after a slight drop on Wednesday, 06/22/05.
The next really noticable move in the predictable part of TSV18 is a 3 day drop beginning with an historically major drop 18 days from 06/16. The predictable portion of this drop means nothing.
If we subtract out the predictable portion of TSV18, what is the unpredictable portion telling us? It is not as bullish as MS, but it is nicely confirming the present move in Price. There is nothing currently bearish about it that I see, but it is slightly bearish compared to 05/18. You should take a look for yourself.
It is much easier to interpret TSV18 when the meaningless, predictable portion is subtracted out. I strongly suggest you do that. I always observe TSV18 Simple with the predictable portion removed. The gymnastics required to remove the predictabe part mentally is beyond my capability.
Thanks,
Jim Murphy
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