Trending vs. Consolidating Markets

[Tom Strickland <tstrickland@xxxxxxxxxxxxx>]

There has been a lot of discussion here lately about determining if the 
market is trending or consolidating. Most of the talk has been about the 
ADX and the VHF. Let me suggest an alternate way of making this 
determination. Take a look at the MACD, and divide it into four zones as 
follows:

	Zone 1:  MACD>0 and MACD>MOV(MACD,9,E)

	Zone 2:   MACD>0 and MACD<MOV(MACD,9,E)

	Zone 3:   MACD<0 and MACD<MOV(MACD,9,E)

	Zone 4:   MACD<0 and MACD>MOV(MACD,9,E)

Now plot the MACD, ADX, and VHF for a given security. You will note that 
the ADX and the VHF are rising when the MACD is in Zones 1 or 3, and they 
will be declining when it is in Zones 2 or 4. Thus, MACD can tell you 
whether the market is trending or consolidating, AND ALSO the direction if 
it is trending. Check it out and see if you agree.

There will be no charge for this profound bit of information I am giving 
you.    :-)

Tom Strickland