tailieunhanh - Technical Analysis from A to Z Part 4

The Demand Index combines price and volume in such a way that it is often a leading indicator of price change. The Demand Index was developed by James Sibbet. Interpretation: Mr. Sibbet defined six "rules" for the Demand Index: 1. A divergence between the Demand Index and prices suggests an approaching weakness in price. | Search OQUIS A REUTERS Company Your shopping cart is empty Purchase Equis Products Online Products Support Events Partners Company Search Tips for Go Technical Analysis from A to Z Preface Acknowledgments Terminology To Learn More PART ONE Introduction to Technical Analysis PART TWO Reference A-C D-L Demand Index Detrended Price Oscillator Directional Movement Dow Theory Ease of Movement Efficient Market Theory Elliott Wave Theory Envelopes Trading Bands Equivolume Candlevolume Fibonacci Studies Four Percent Model Fourier Transform Fundamental Analysis Gann Angles Herrick Payoff Index Interest Rates Kagi Large Block Ratio Linear Regression Lines M-O P-S T-Z Bibliography About the Author Formula Primer User Groups Educational Products Training Partners Related Link Traders Library Investment Bookstore Technical Analysis from A to Z by Steven B. Achelis DEMAND INDEX Overview The Demand Index combines price and volume in such a way that it is often a leading indicator of price change. The Demand Index was developed by James Sibbet. Interpretation Mr. Sibbet defined six rules for the Demand Index 1. A divergence between the Demand Index and prices suggests an approaching weakness in price. 2. Prices often rally to new highs following an extreme peak in the Demand Index the Index is performing as a leading indicator . 3. Higher prices with a lower Demand Index peak usually coincides with an important top the Index is performing as a coincidental indicator . 4. The Demand Index penetrating the level of zero indicates a change in trend the Index is performing as a lagging indicator . 5. When the Demand Index stays near the level of zero for any length of time it usually indicates a weak price movement that will not last long. 6. A large long-term divergence between prices and the Demand Index indicates a major top or bottom. Example The following chart shows Procter Gamble and the Demand Index. A long-term bearish divergence occurred in 1992 as prices rose while