Indicator Confusion

[cpatte7372]

Hi all,

As some of you may know, I've been using the demand index indicator to identify accumulation and distribution on selected stocks. In essence the demand index measures both price and volume, calculated using buying pressure and selling pressure.

My understanding of indicators is that they follow the footprints of money. However, yesterday I was using the demand index on LIZ to indicate if the securities price and volume were appreciating. The demand index was appreciating through out day thereby indicating that the securities volume and price was going up, however the price was actually tumbling.

Now, if indicators follow the footprints of money can someone please explain why the demand index was appreciating while the stock price was actually tanking.

I'm sure there is some logical explanation but I'm a little confused

As always I appreciate all feed back I get.

Cheers

Carlton

[DuaneG]

Hi Carlton,

If you could post a screenshot of the timeframe in which this was occurring, I believe I can clarify this for you. Please let me know what time frame you are working from and I'll respond as soon as possible with a breakdown of the price reaction to the study. Thanks.

[cpatte7372]

Hi Duane,

Thanks for getting back to me. I have attached a screenshot of the chart, including the demand index indicator I was using. I have annotated it which I hope helps.

I really appreciate your help in this, as my confidence in this indicator as waned a little.

I understand that there is no holy grail indicator out there, however this type of indicator should just report the footprints of money. Therefore, when a stock is going up I would expect the indicator to follow shortly after - or is that not the case?

Thanks again mate.

Carlton