Moving Average Analysis of ADM

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From the Weekend Report 11/5/2010: The week revealed ADM to still be above the 200 bar average, but the space between the price and the average line is narrowing.

Recent Averages with Candlestick Chart. of Archer-Daniels-Midland

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Different ways of averaging are tested on ADM stock prices for their ability to predict trend movements. Techniques available include moving weighted or exponential averages of various periods and the family of MACD (Moving Average Convergence Divergence) indicators.

Unfortunately, some of the most popular indicators of this type can prove to be the worst forcasting indicators. The effectiveness of these methods as applied to ADM stock price trend evaluation is tested on the next page.

The 200 session average is red, the 20 bar, green. The un-sophisticated moving averages plotted here are un-weighted, but they still may return better results than many of the more popular, highly tuned averages seen in some of the following sections. Commonly, speculators will use exponential averages or weighting techniques to emphasize the most recent data. But past a certain point, such front weighting can dramatically increase false signals. Norman G. Fosback has noted that legitimate signals of this sort will normally be evident through a variety of averaging methods.

Moving Average Convergence of Archer-Daniels-Midland

	Companies In the News
	Monday, November 15, 2010: We have news on PG&E Corporation, ticker symbol PCG. A significant moving average event has happened. Also, there are breaking events concerning Cree, Inc. and Abbott Laboratories. From the News Archive: (11/12/2010 ) A favorable event happened at PetSmart, Inc. Meanwhile, bad news came from Intel, Chesapeake Energy Corporation, and JP Morgan Chase.

MACD analysis is dangerously suited for overtuning, since it may use any of an infinite number of averaging methods and coefficients. In addition to crossover signals based on moving averages, many analysts add a trigger line which is based on some average of the first two averages. Here we depict the results of 12 and 26 session Exponential Moving Averages. The exponential coefficient used here is .18. There is nothing magic about these parameters, but these are frequently seen.

Float the cursor for a longer term chart.

Moving Average Convergence Divergence, or MACD, produces buy or sell signal that are color tinted here.

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Moving Avg. 20/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 33 instances
Future30SesAvgClose	1.17 % minus 0.85 % = 0.33 %	2.76 %
Future5SesAvgClose	0.08 % minus 0.17 % = -0.09 %	-4.78 %
Future2SesAvgClose	0.20 % minus 0.09 % = 0.11 %	13.87 %
Sell Signals - 33 instances
Future30SesAvgClose	0.59 % minus 0.85 % = -0.26 %	-2.19 %
Future5SesAvgClose	-0.04 % minus 0.17 % = -0.21 %	-10.87 %
Future2SesAvgClose	0.06 % minus 0.09 % = -0.03 %	-3.80 %
	.
Moving Avg. 5/20 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 191 instances
Future30SesAvgClose	0.93 % minus 0.85 % = 0.08 %	0.68 %
Future5SesAvgClose	0.46 % minus 0.17 % = 0.29 %	14.54 %
Future2SesAvgClose	0.26 % minus 0.09 % = 0.17 %	21.93 %
Sell Signals - 191 instances
Future30SesAvgClose	0.72 % minus 0.85 % = -0.13 %	-1.07 %
Future5SesAvgClose	-0.10 % minus 0.17 % = -0.27 %	-13.69 %
Future2SesAvgClose	-0.12 % minus 0.09 % = -0.21 %	-26.12 %
	.
Moving Avg. 5/200 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 59 instances
Future30SesAvgClose	0.97 % minus 0.85 % = 0.12 %	1.02 %
Future5SesAvgClose	0.09 % minus 0.17 % = -0.08 %	-3.95 %
Future2SesAvgClose	0.21 % minus 0.09 % = 0.12 %	14.71 %
Sell Signals - 59 instances
Future30SesAvgClose	0.99 % minus 0.85 % = 0.15 %	1.24 %
Future5SesAvgClose	0.06 % minus 0.17 % = -0.12 %	-5.89 %
Future2SesAvgClose	-0.08 % minus 0.09 % = -0.17 %	-21.59 %
	.
MACD 12/26 Divergence	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 684 instances
Future30SesAvgClose	0.76 % minus 0.85 % = -0.09 %	-0.74 %
Future5SesAvgClose	0.06 % minus 0.17 % = -0.11 %	-5.45 %
Future2SesAvgClose	0.03 % minus 0.09 % = -0.06 %	-7.15 %
Sell Signals - 684 instances
Future30SesAvgClose	0.82 % minus 0.85 % = -0.03 %	-0.22 %
Future5SesAvgClose	0.06 % minus 0.17 % = -0.11 %	-5.82 %
Future2SesAvgClose	0.00 % minus 0.09 % = -0.09 %	-11.47 %
	.
MACD 12/26 Signal	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 960 instances
Future30SesAvgClose	0.95 % minus 0.85 % = 0.11 %	0.90 %
Future5SesAvgClose	0.18 % minus 0.17 % = 0.00 %	0.16 %
Future2SesAvgClose	0.14 % minus 0.09 % = 0.05 %	6.67 %
Sell Signals - 960 instances
Future30SesAvgClose	0.85 % minus 0.85 % = 0.00 %	0.01 %
Future5SesAvgClose	0.13 % minus 0.17 % = -0.04 %	-2.04 %
Future2SesAvgClose	0.08 % minus 0.09 % = -0.01 %	-1.34 %
	.
Calibrated M by Q Half Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 372 instances
Future30SesAvgClose	0.58 % minus 0.85 % = -0.27 %	-2.25 %
Future5SesAvgClose	0.05 % minus 0.17 % = -0.12 %	-6.21 %
Future2SesAvgClose	-0.08 % minus 0.09 % = -0.17 %	-21.48 %
Sell Signals - 372 instances
Future30SesAvgClose	1.01 % minus 0.85 % = 0.16 %	1.36 %
Future5SesAvgClose	0.42 % minus 0.17 % = 0.25 %	12.48 %
Future2SesAvgClose	0.24 % minus 0.09 % = 0.15 %	19.14 %
	.
Calibrated M by Q Full Cycle Moving Avg.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 273 instances
Future30SesAvgClose	0.38 % minus 0.85 % = -0.47 %	-3.98 %
Future5SesAvgClose	-0.20 % minus 0.17 % = -0.37 %	-18.93 %
Future2SesAvgClose	-0.25 % minus 0.09 % = -0.34 %	-42.75 %
Sell Signals - 273 instances
Future30SesAvgClose	1.12 % minus 0.85 % = 0.27 %	2.29 %
Future5SesAvgClose	0.44 % minus 0.17 % = 0.26 %	13.41 %
Future2SesAvgClose	0.37 % minus 0.09 % = 0.28 %	35.51 %
	.
Projected Crossing of SMA 20/200.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 38 instances
Future30SesAvgClose	2.03 % minus 0.85 % = 1.18 %	9.97 %
Future5SesAvgClose	0.37 % minus 0.17 % = 0.20 %	10.14 %
Future2SesAvgClose	0.37 % minus 0.09 % = 0.29 %	36.27 %
Sell Signals - 40 instances
Future30SesAvgClose	0.62 % minus 0.85 % = -0.23 %	-1.96 %
Future5SesAvgClose	-0.29 % minus 0.17 % = -0.46 %	-23.39 %
Future2SesAvgClose	0.00 % minus 0.09 % = -0.09 %	-10.99 %
	.
Projected Crossing of SMA 5/20.	Signaled Appreciation minus non-signaled Appreciation	Annualized %
Buy Signals - 241 instances
Future30SesAvgClose	1.72 % minus 0.85 % = 0.87 %	7.37 %
Future5SesAvgClose	0.62 % minus 0.17 % = 0.45 %	22.71 %
Future2SesAvgClose	0.50 % minus 0.09 % = 0.41 %	52.52 %
Sell Signals - 203 instances
Future30SesAvgClose	0.30 % minus 0.85 % = -0.55 %	-4.67 %
Future5SesAvgClose	-0.33 % minus 0.17 % = -0.51 %	-25.71 %
Future2SesAvgClose	-0.17 % minus 0.09 % = -0.26 %	-33.40 %
	.

The best buy signal for 30 future sessions was 1.18 % from the Projected Crossing of SMA 20/200.,and the best sell signal for was -0.55 % from the Projected Crossing of SMA 5/20..

For 5 future sessions the best buy signal was 0.45 % from the Projected Crossing of SMA 5/20.,and the best sell signal was -0.51 % from the Projected Crossing of SMA 5/20..

The best buy signal for 2 future sessions was 0.41 % from the Projected Crossing of SMA 5/20.,and the best sell signal was -0.26 % from the Projected Crossing of SMA 5/20..

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