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bradsticker
Posted : Thursday, March 15, 2007 1:25:42 PM
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Joined: 3/15/2005
Posts: 95
There was a March 9 article in the Wall Street Journal about how ETFs are having an outsized impact on the traded volume of small cap stocks. ETFs buy and sell many times during the day based only on whether the stock is in an index without regard to the fundamentals or the technical indicators. How, or to what extent, does this affect BOP, TSV, and moneystream? Are these indicators adjusted in any way to screen out the ETF volume?
thanks,
bradsticker
StockGuy
Posted : Thursday, March 15, 2007 5:16:42 PM

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Joined: 9/30/2004
Posts: 9,187
Without knowing the exact formulas for those indicators, I'm not exactly sure. But no adjustment is made to screen out ETF volume.
bradsticker
Posted : Friday, March 16, 2007 8:26:27 AM
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Joined: 3/15/2005
Posts: 95
Stockguy,
One of the techniques on the Moneystream video is to look for divergences between price and Moneystream (which is partially derived from volume). If volume is high because of ETF "churn", it would make Moneystream higher and possibly create a divergence. The divergence would not be due to "smart money" buying (or selling) but only due to ETF churn. Thus wouldn't Moneystream become less reliable because of ETF churn?

Thanks,
Bradsticker
Craig_S
Posted : Friday, March 16, 2007 8:29:23 AM


Worden Trainer

Joined: 10/1/2004
Posts: 18,819
I think that is a question for Don Worden (creator of MoneyStream).

I would email him via support@worden.com and ask him.

- Craig
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