Selling on Strength (a new perspective)

  • Posted: 23 August 2012 01:00 AM

    AAPL was #1 (again) on the Selling on Strength list today.  Ostensibly the list is to alert investors on the dire tion big players are thinking.

    I have followed this list, and the Buying on Weakness list for some time.

    Well, after today’s action I checked the list, and there AAPL was at the top.  Then it occurred to me to compare the dollar value of the Block trades that constituted Selling on Strength, to total money flow (multiplying share volume times average of intraday high and low).

    What a shocker.  The dollar value of block trades that made AAPL #1 on the Selling on Strength list accounted for only 1.6% of total money flow (using my formula for money flow).

    This is hardly earthshaking volume.  Unless someone can convince me otherwise, this a metric I won’t be using in the future, to determine institutional sentiment.

    Signature

    You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.

         
  • Posted: 23 August 2012 02:09 AM #1

    Gregg Thurman - 23 August 2012 04:00 AM

    AAPL was #1 (again) on the Selling on Strength list today.  Ostensibly the list is to alert investors on the dire tion big players are thinking.

    I have followed this list, and the Buying on Weakness list for some time.

    Well, after today’s action I checked the list, and there AAPL was at the top.  Then it occurred to me to compare the dollar value of the Block trades that constituted Selling on Strength, to total money flow (multiplying share volume times average of intraday high and low).

    What a shocker.  The dollar value of block trades that made AAPL #1 on the Selling on Strength list accounted for only 1.6% of total money flow (using my formula for money flow).

    This is hardly earthshaking volume.  Unless someone can convince me otherwise, this a metric I won’t be using in the future, to determine institutional sentiment.

    Can you explain why you ever used it? If the only thing that matters is institutional sentiment and the stock goes up then institutions must be net buyers, right? If the stock goes down then institutions must be net sellers, right?

    Not if this money flow metric is any indicator. I can’t tell you how often people post here that Apple was #1 for selling on strength on days when AAPL is UP. I don’t care who “sells on strength” as long as the stock goes up. My vote goes to this metric being worth less than one share of SMNG.

         
  • Posted: 23 August 2012 03:29 AM #2

    adamthompson32 - 23 August 2012 05:09 AM

    Can you explain why you ever used it?

    I use the tools offered, until I find something better.  Don’t you?

    Signature

    You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.