Impressive work Vladimir. I am also from Brazil, and I was just wondering what a NH-NL index for the Ibovespa would look like when I found this blog! However, I do wonder if it is a reliable indicator for the Brazilian market.
According to Mr. Elder's explanation, the NH-NL index can not be used in markets who are dominated by only a few stocks. For those unfamiliar with the Brazilian market, Ibovespa, our main index, is a volume weighed index, currently composed by 66 stocks. Of these 66, the 2 biggest stocks, Petrobrás and Vale do Rio Doce (both of which are traded as ADRs in the NYSE), are responsible for 40% of the total volume. Do you guys think the NH-NL index can be used in these circunstances?
point well taken - and thank you for useful information.
Seems to me that while the bovespa idex is in fact dominated by those two stocks, the NH-NL should give a much broader perspective on the market as a whole.
In view of the Brazilian index composition, I would take its NH-NL at a slight discount, but still consider it valuable.
Mr Elder, Thank you for your input. Last year was my first as a trader, and thanks largely to your teachings, I was able to not only survive the historic crash but even post a slight profit! In a few years I expect to be able to meet you in person at a Trader's Camp. In the meantime, I look forward to enjoying your wonderful work that helps traders all over the world. Regards, Tito
Impressive work Vladimir. I am also from Brazil, and I was just wondering what a NH-NL index for the Ibovespa would look like when I found this blog! However, I do wonder if it is a reliable indicator for the Brazilian market.
ReplyDeleteAccording to Mr. Elder's explanation, the NH-NL index can not be used in markets who are dominated by only a few stocks. For those unfamiliar with the Brazilian market, Ibovespa, our main index, is a volume weighed index, currently composed by 66 stocks. Of these 66, the 2 biggest stocks, Petrobrás and Vale do Rio Doce (both of which are traded as ADRs in the NYSE), are responsible for 40% of the total volume. Do you guys think the NH-NL index can be used in these circunstances?
Tito,
ReplyDeletepoint well taken - and thank you for useful information.
Seems to me that while the bovespa idex is in fact dominated by those two stocks, the NH-NL should give a much broader perspective on the market as a whole.
In view of the Brazilian index composition, I would take its NH-NL at a slight discount, but still consider it valuable.
Mr Elder,
ReplyDeleteThank you for your input. Last year was my first as a trader, and thanks largely to your teachings, I was able to not only survive the historic crash but even post a slight profit! In a few years I expect to be able to meet you in person at a Trader's Camp. In the meantime, I look forward to enjoying your wonderful work that helps traders all over the world.
Regards,
Tito