Ian Woodward's Investing Blog

Using Chaikin’s Money Flow for Snakes and Ladders

A Happy and Prosperous New Year from the HGSI Team to you with a gift for the New Year. In my last blog which gave you a smorgasbord of goodies to watch in the New Year, the one that stood out like a sore thumb was Chaikin’s Money Flow.  So with my Partner Ron Brown’s help, we came up with the following four snapshots which should keep you on your toes in the New Year.  I modified the 9a Key View on the HGSI Software Charting Module to include two other periods besides the standard 21-Period.  They are the 13 and 34 Period.  Ron and I felt that the 50 period was too slow and didn’t add any information.  Just make two new windows and change the 21-period to 13 and 34 respectively and color code them differently as shown below and you are done.  Make sure to select “histogram”. 

Shown below are both Daily and Weekly Views for the NYSE and Nasdaq, making four snapshots in all.

           nyse daily

           nasdaq daily

           nyse weekly

           nasdaq weekly

The bottom line messages are straightforward:

1.  Since the Nasdaq is the Strongest watch it first; then the NYSE for a breakdown below zero

2.  With a correction to the downside, Chaikin will go Negative on the 13-Period first, then the 21 & 34

3.  Early Warning after Chaikin turns negative is the %A/D Ribbon turns Yellow and then Red

4.  Chaikin Targets for the Upside Scenario are above 0.30 and preferably 0.50 for a continued Rally

Best Regards to you all, and may all your trades be strong is the sincere wish of your friend, Ian.

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Disclaimer: Commentaries on this Blog are not to be construed as recommendations to buy or sell the market and/or specific securites. The consumer of the information is responsible for their own investment decisions.