Monday, March 8, 2010

AIG gap and signals

Government-owned AIG gapped up sharply this morning, opening 4.8% above Friday's close, on news that it was selling a unit to another company.

Normally I don't analyze big moves after news announcements. I note this move only because of the signals.

The macd gave a bull signal on Thursday, and the pps followed with a signal on Friday. The news was announced on Monday, an hour before the market opened. The psar bull signal kicked in only after the move had happened.

So clearly, there was enough information in the wind prior to the announcement to influence the macd's moving averages and whatever black-box magic informs the pps.


Abbreviations:
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic
   

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