Justin Mamis and his indicators

Discussion in 'Technical Analysis' started by dbphoenix, Apr 10, 2004.

  1. dbphoenix


    I'm often asked about books, particularly now with regard to the journal thread I've been sponsoring (below), and I've always put Mamis' trilogy at the top of the list: The Nature of Risk, When to Buy, and How to Sell.

    Mamis doesn't have much use for mathematically-derived indicators like RSI or CCI. Rather he looks at the same sorts of "indicators" that Zweig does, such as short-selling activity, bull and bear percentages, and the only one that I follow, the differential between volume of advancers and of decliners.

    All of which is a preface to the following interview conducted in January, in which Mamis states that most of the indicators he used to rely on are of little use to him due to changes in market psychology and dynamics.

    Therefore, for those to whom I've recommended Mamis' books and for Mamis fans everywhere, the interview:


    Note that this does NOT mean that I no longer recommend Mamis. The point is that an understanding of price action and volume action and the relationship between the two are more important than ever. That and an understanding of market psychology.

    Why did I start a separate thread for this? Because I think it's important enough.
  2. Great article !!!

    Thanks for sharing db ....
  3. Hello DB:
    I have not read Mamis books however, I notice that Lowry's suggested recently that A/D is no longer as useful as it used to be. This because almost of half of the listed companies on the NYSE are not operating companies. On Lowery's website they showed an "adjusted" advance/decline that favored advancers. This structural change in the way the market works may be happening along several fronts, accounting for Mr. Mamis change of heart regarding indicators. Best Regards, Steve46
  4. dbphoenix


    This also makes the new highs and new lows and the differential between them almost useless, whereas it was one of the most important guides I used, especially in Oct '98.

    But the AVDVd (differential between volume of advancers and decliners) is still effective. The chart below is of the most recent timeframe. Across the top are 5d MAs of the NYSE AD line and AVDVd, next are the same for the Naz, and, at the bottom, a line chart of the Naz price. You'll see where the divergences gave you permission to buy during the recent bounce.
  5. =========================================

    I mentioned to another elite trader in a helpful way;
    wouldnt put RSI at the top of the charts either.

    Like the way that former trader, mr. Mamis at NYSE specialist firm mentioned moving averages in his book;
    thats why I am somewhat puzzled about his concern about more ENRONS in market.:cool:
  6. dbphoenix


    The following is a longer-term chart using AVDV and price only (no AD lines):
  7. abogdan


    Very interesting! Thanks
  8. zdreg


    referrals like this make this board worthwhile, unfortunately with the growing number of opinionated knownothings on this board one must dig for these gems. thx
  9. zdreg


  10. dbphoenix


    These kinds of articles always get posted at the wrong time. Of course his value plays have done well over the last two years. The market turned 18 months ago. Duh. But that was the easy part. Now let's see what he does over the NEXT two years.

    I've discussed the AVDVd for years, but since so many (most) people are so impatient, they have no interest in something that provides signals at best once or twice a year. But then they whine about finding the bottom or finding the top, then missing the bottom or missing the top. Now everybody wants in and wants to know how to find entry points when they're all 18 months too late.

    The irony is that it doesn't have to be checked at all until one or more of the indices reaches an extreme, which may occur in the next few weeks, and then only once or twice a week until the swing point is formed. And if there are any doubts as to what one is looking at, one can plot a 50/200 (or 10/40 wkly) just for confirmation. Along with the price/volume, of course :D
    #10     Apr 11, 2004