Ask Colin

You quote in Shares Weekly 13-20 October 2000, "The third and most worrying sign is that the MACD Histogram has made lower peaks in July, August/September and now again in October, where it barely clawed its way to positive territory". My MACD for MXO using Metastock (setting 9 signal periods)...looks nothing like the MACD in your MXXO chart..in fact my chart shows MACD negative peak in April. ..with peaks becoming positive & increasing height from July to Sept...with a lower peak in Oct (at most recent prices. i.e. my chart shows no divergence at all in MXO MACD...any suggestions why this may be so...do I have time periods set differently to yourself?

You quote in Shares Weekly 13-20 October 2000, "The third and most worrying sign is that the MACD Histogram has made lower peaks in July, August/September and now again in October, where it barely clawed its way to positive territory".

My MACD for MXO using Metastock (setting 9 signal periods)...looks nothing like the MACD in your MXXO chart..in fact my chart shows MACD negative peak in April. ..with peaks becoming positive & increasing height from July to Sept...with a lower peak in Oct (at most recent prices. i.e. my chart shows no divergence at all in MXO MACD...any suggestions why this may be so...do I have time periods set differently to yourself?

I think the problem may be that you are looking at MACD, while I am talking about MACDH or MACD Histogram as stated in the article.

MACD settings are usually 26, 12, 9. I am not sure how Metastock does it with only one parameter.

The MACD comprises two lines: The fast MACD line which is the difference between a 26 day exponential moving average and a 12 day exponential moving average. The slow Signal line which is a 9 day exponential moving average of the fast MACD line.

MACDH is simply the difference between the MACD and the Signal line.

I hope this clarifies it for you.

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