Amfil Technologies Inc (FUNN)

[tothe]

AMFE chart~~~ Multicollinearity a common TA mistake
chart & tools thread

Multicollinearity is a statistical term for a problem that is common in technical analysis. That is, when one unknowingly uses the same type of information more than once. Analysts need to be careful and not utilize technical indicators that reveal the same type of information.
http://stockcharts.com/search/?q=Multicollinearity

A typical three indicator chart
http://stockcharts.com/h-sc/sc?s=AMFE&p=D&yr=0&mn=3&dy=0&i=p34155573500&a=529998177&r=1497754764882



How to use indicators from Lowtrade compiled from his posts. Quick & condensed for reference:

Momentum
TRIX - rate-of-change of smoothed moving average momo
StochRSI - overbought and oversold levels in RSI momo
ROC - percent change momo
Stochastic - over bought / over sold momo
RSI - Average Gain / Average Loss momo
WM%R - price close vs. range top /bottom momo
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Trend
Aroon - close high /low trend
DMI - price direction / ADX strength trend
ATR - gap /small move - up down reversal trend
Macd - +/- moving averages - direction & strength trend
PPO - increasing / decreasing price trend
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Volume
PVO - increasing / decreasing volume volume
OBV - close above vs below totals volume
Acc/Dist - ave close totals volume
CMF - A/D strength divided by volume = pressure volume
MFI - RSI volume-weighted volume

TRIX & Aroon are trend indicators, not momo. As they are not oscilators but do present a stocks trend indication.
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Momentum/ Trend indicators
RSI, & MFI; are oscillators. Good for support of trend.

MFI over bought over sold; 0 to 100, 50 is zero
RSI over bought over sold; o to 100, 50 is zero

The Money Flow Index (MFI) is a momentum indicator that is similar to the Relative Strength Index (RSI) in both interpretation and calculation. However, MFI is a more rigid indicator in that it is volume-weighted, and is therefore a good measure of the strength of money flowing in and out of a security
In essence MFI is the volume-weighted RSI of money flow.


Volume indicators

OBV & CMF are volume indications good for pressure expected when a move starts.CMF shows pressure. 0 is zero + positive, - negative
Accumulation Distribution shows pressure, bottom is zero shows increasing and decreasing. Not +/-
OBV being less useful then AccumDist, AccumDist which is in turn less useful the CMF. Because AccumDist was an improvement to OBV and CMF an improvement to AccumDist.We should always put more weight on CMF.

Being in or being out vs. get in or get out: RSI and MFI

Like StochRSI, MFI shows 2 indications. Strength & overbought/oversold, because it graphs like an oscilator. It mainly relies on RSI for it's basis.

MFI uses volume with RSI to determine if more money is coming into a stock, then going out. And because the consensus is, price follows volume. You can judge entry/exit with the RSI position on the graph. MFI above 80 signals entry and below 20 exit.

While StochRSI signals Be In the stock or Be Out of the stock. MFI signals Get In or Get Out.
It has a different focus then OBV, Acc/Dist, or CMF. While being in the volume group, because it uses volume in it's formula. It is mainly used for decision making, rather then support.

Like the Aroon, I disagree with where the books place this indicator. I would put it in the momo group, where you find other decision making indicators. They have the aroon in the momo group for decisions and I would place that in the trend group.

RECAP, MFI determines entry exit, or positive negative momentum. It's name and placement in the volume group is misleading. IMO


Summery
Choose 3 indicators, one momentum, one trend & one volume. Your watching for trend entry, will retail support your decision and how strong to expect any move you enter, will be. My choices to fulfill these are StochRSI, DMI and CMF.

StochRSI - overbought and oversold levels in RSI indicates momentum
StochRSI signals Be In the stock or Be Out of the stock.StochRSI shows 2 indications: strength & overbought/oversold, because it graphs like an oscillator.

DMI - price direction / ADX strength indicates trend
ADXis non-directional; it registers trend strength whether price is trending up or down.

ADX Value    Trend Strength 
 0-25         Absent or Weak Trend  
 25-50        Strong Trend  
 50-75        Very Strong Trend  
 75-100       Extremely Strong Trend

CMF - A/D strength divided by volume = pressure indicates volume
CMF is a volume indication good for pressure expected when a move starts.CMF shows pressure. 0 is zero + positive, – negative

MFI - While StochRSI signals Be In the stock or Be Out of the stock. MFI signals Get In or Get Out.
It has a different focus then OBV, Acc/Dist, or CMF. While being in the volume group, because it uses volume in it's formula. It is mainly used for decision making, rather then support.

sources
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45219382&txt2find=mfi
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45336616&txt2find=mfi
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45337703&txt2find=mfi
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=48320279&txt2find=mfi
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46259534&txt2find=mfi


Tracking market sentiment for entry using three month technical chart

Basic entry indicators

Choose 3 indicators, one momentum, one trend & one volume. Your watching for trend entry, will retail (AccumDist) or +5% holders (OBV)support your decision and how strong to expect any move you enter, will be. My choices to fulfill these are StochRSI, DMI and CMF.

StochRSI - overbought and oversold levels in RSI indicates momentum
StochRSI signals Be In the stock or Be Out of the stock.StochRSI shows 2 indications: strength & overbought/oversold, because it graphs like an oscillator.

DMI - price direction / ADX strength indicates trend
ADXis non-directional; it registers trend strength whether price is trending up or down.

ADX Value    Trend Strength 
 0-25         Absent or Weak Trend  
 25-50        Strong Trend  
 50-75        Very Strong Trend  
 75-100       Extremely Strong Trend

CMF - A/D strength divided by volume = pressure indicates volume
CMF is a volume indication good for pressure expected when a move starts CMF shows pressure. 0 is zero + positive, – negative

A decision indicator

MFI - While StochRSI signals Be In the stock or Be Out of the stock. MFI signals Get In or Get Out.
It has a different focus then OBV, Acc/Dist, or CMF. While being in the volume group, because it uses volume in it's formula. It is mainly used for decision making, rather then support.

The support indicators

TOTHE's charting compilation for investor sentiment:

I use the three indicators below to track the sentiment of the different sectors of investors in a stock, their actions on the chart coincide with the actions within these three different sectors of investors/traders:

First... On Balance Volume is the one that tracks insider and off restriction registered shareholder money going in and out of the stock. The OBV indicator will go down when different SEC forms are filed showing preferred conversions into commons, restricted becoming unrestricted or distribution by insiders (yes, it that “D” in that box on form 4}. Example using the 20 day moving average filter: OBV (EMA 20) or MA(20) trend line up indicates no dilution. Daily spikes of the OBV indicator show settled & unsettled shares, shorting & covering as the MA(20) filters out the rough spots.

Second ... Accumulation/Distribution tracks the individual retail shareholder. many times Accum/Dist will go up while the PPS of a stock is going lower and lower; also while the PPS is going lower, investors on the message board for the stock, will be talking about buying, and how many shares they hold.

Thirdly... Chaikin Oscillator controls the PPS more than the other two.... the PPS will tank when this indicator goes down, even if OBV and Accum/Dist are going up, this fact alone makes know this indicator tracks "the shares" that rule the stock (MMs in other words). OBV, and Accum/Dist can be going up, but until ChiOsc goes up the PPS will stay lower, or continue going down..... ChiOsc can go up before the PPS goes up, indicating that MMs are accumulating before a run. Now that the shorting rule has changed to allow shorting on the way down, they can cover on the way down, this also makes it easier for them to short a stock into the ground.
http://www.examiner.com/finance-examiner-in-national/tomorrow-begins-new-market-rules-for-short-sellers



Note on BB's that I have found after much observation:
The bottom Bollinger Band isn't used to detect shorting, it is a percentage indicator of the PPS movement. The bottom Bollinger will go down fast when a stock has a low beta and makes a significant move. MMs will usually keep the "close of the day" in a tight range to bring the Bottom B Band up to the PPS area before taking the PPS up. A good book to read for Bollinger Bands is "Bollinger on Bollinger Bands" by Bollinger.

Summery
OBV = Insiders, big share holder investors(institutional, etc. and Registered shareholders, that is; individual shareholders with more than 5% holdings in the company.

Accum/Dist = over the counter individual Retail shareholders with less than 5% of the company stock.

ChiOsc = those who control the stock PPS and chart actions, that being MMs. Try to think of the various MM shops as computer driven algorithms which in reality what they are. This paradigm change in perception may cause trauma to newbie swing-traders who still believe in Santa Claus and that MMs are live people.

These three technical indicators have explanations on StockCharts.com and other places, that tell what they do technically, but they also work to track the buy/sell sentiment of the different sectors of shareholders

The Four Dilution Over Indicators

Watch for OBV, CHiOsc, MFI and Accum/Dist all turning up together... with less weight to Accum/Dist. & more weight to ChiOsc & MFI turning up together.

CMF study

There are 3 main money flow indicators, OBV on balance volume, Accum/Dist accumulation distribution and CMF Chaikin money flow.
Each an improvement on the one before. OBV uses raw daily close data; Accum/Dist uses daily "close location values", CLV to plot a line; and CMF uses Accum/Dist and weighs it over a period of time, giving an over all positive negative pressure indication, above or below zero.

Strong positive pressure is seen when the CMF is above .25 and strong negative when the CMF is below - .25.

The reason you can see positive CMF with a price decline is found in the way the CLV is determined.
1.If the stock closes on the high, the top of the range, then the value would be plus one.
2.If the stock closes above the midpoint of the high-low range, but below the high, then the value would be between zero and one.
3.If the stock closes exactly halfway between the high and the low, then the value would be zero.
4.If the stock closes below the midpoint of the high-low range, but above the low, then the value would be negative.
5.If the stock closes on the low, the absolute bottom of the range, then the value would be minus one.

The CLV is then multiplied by the corresponding period's volume, and the cumulative total forms the Accumulation/Distribution Line.

CMF take this for 21 days and uses an average. So if several days close at the high end of the daily price spread, event though the price is declining, the high closes will effect the average. The more high EOD finishes the more positive pressure is injected into the formula. Every day the oldest days data is removed and the newest days added.

So with OBV all volume is added with a close above mid daily price range. With Accum/Dist only portions of the volume depending on the close position and CMF bundles the Accum/Dist line data for a period of time. Creating a pressure indication, more then flow indication.

Money flow is thought to precedes price. OBV is very basic (all or nothing), Accum/Dist balances data (to plot a direction line) and CMF combines data (showing pressure over time)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50505000
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Rule
When CMF is in selling and Stoch RSI at BE IN, retail is buying and big guys selling. When CMF is buying and Stoch RSI is at BE OUT. Retail is selling and big guys buying. I think of Stoch RSI as what retail wants and CMF the bank. Customers deposit and withdraw from the bank, during conflict.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75458527

http://stockcharts.com/h-sc/ui?s=AMFE&p=D&yr=0&mn=3&dy=0&i=p40273378274&a=526498499&r=1497756435310