lowtrade

[MrBigz]

GCOG

Hi lowtrade.

I hate you bug you so much this weekend, but I'm trying to learn some of the things you are teaching, and I have a question.

First off, I have no interest in buying shares in GCOG - only trying to learn from the chart.

I am interested in the high volume and negative CMF in early August. Would you assume dilution and if so, what other indicators would you look at to make this determination?
I would think it odd that shareholders all decided at the same time to dump their holdings, especially at "the bottom".

thx,

MBL



Distribution Indications

The Chaikin Money Flow oscillator generates bearish signals by indicating that a security is experiencing selling pressure, or distribution. As with the bullish signals, there are three items used to determine whether or not a security is experiencing selling pressure and the intensity of that selling pressure.

1.
The first and most obvious bearish signal is when Chaikin Money Flow is negative. A negative reading indicates that the security in question is under selling pressure or experiencing distribution.
2.
The second bearish signal is the duration of the negative Chaikin Money Flow reading. The longer the oscillator remains negative, the greater the evidence of sustained selling pressure or distribution. Extended periods below zero indicate that sentiment towards the underlying security is bearish, and there is likely to be downward pressure on the price as well. The length of time can be determined by measuring the percentage of time that the indicator remains below zero. If Chaikin Money Flow is negative to 3 out of 4 weeks, then it would be experiencing selling pressure 75% of the time.
3.
The third bearish signal is the intensity of selling pressure or distribution. This can be determined by the oscillator's absolute level. Once the indicator moves below -.10, the degree selling pressure begins to warrant a bearish signal. Any further movement would increase the degree of selling pressure. Marc Chaikin considers a reading below -25 percent (-.25) to be indicative of strong selling pressure. These levels are general guidelines, and determining the significance of a reading's intensity should be based on the characteristics of the individual security and past readings for Chaikin Money Flow.