Moving Average Convergence Divergence ( MACD ) Charts

The Moving Average Convergence Divergence charts, or MACD charts for short, are a technical indicator that is derived from more simple moving average.

The MACD charts are oscillating indicators, meaning that they move above and below a centerline or zero point. As with other oscillating and momentum indicators, a very high value indicates that stock is overbought and will likely drop soon. Conversely, a consistently low value indicates that stock is oversold and is likely to climb.

THE 12-DAY AND 26-DAY EMAS

The MACD charts are based on 3 exponential moving averages, or EMA. These averages can be of any period, though most common combination, and one we will focus on, are 12-26-9 MACD charts.

There are 2 parts to MACD. We will focus first on first part, which is based on stock's 12-Day and 26-Day EMA. The 12-Day EMA is faster EMA while 26-Day is slower.

The logic behind using a faster and slower EMA is that this can be used to gauge momentum. When faster (in this case 12-Day) EMA is above slower 26-Day EMA, stock is in an uptrend, and vice versa. If 12-Day EMA is increasing much faster than 26-Day EMA, uptrend is becoming stronger and more pronounced. Conversely, when 12-Day EMA starts slowing down, and 26-Day begins to near it, stock movement's momentum is beginning to fade, indicating end of uptrend.

THE MACD LINE The MACD charts use these 2 EMA by taking difference between them and plotting a new line. Very often, this new line is depicted as a thick black line in middle chart.

When 12-Day and 26-Day EMA are at same value, MACD line is at zero. When 12-Day EMA is higher than 26-Day EMA, MACD line will be in positive territory. The further 12-Day EMA is from 26-Day EMA, further MACD line is from its centerline or zero value.

THE 9-DAY EMA

This line on its own doesn't tell much more than a moving average. It becomes more useful when we take into account its 9-Day EMA. This is third value when we talk of 12-26-9 MACD charts. Note that 9-Day EMA is an EMA of MACD line, not of stock price. This EMA (the thin blue line alongside MACD line) acts like a normal EMA and smoothes MACD line.

Credit Counseling Questions.

 When you find yourself thinking about using a credit counseling service, you need to be very careful. You need someone who will help you, not just some pushy sales associate who wants only to sign you up for their service. The debt industry has grown dramatically as American consumer has taken on an increasing load of debt. This increased competition for debt dollar has attracted some charlatans to industry. You need to be very careful you know with whom you are dealing. You are about to place your financial life in someone else’’s hands. Make sure you have answers to some questions before you do. Then make sure you like answers to your questions. Here are some for starters:

Is counseling agency affiliated with major industry groups? There are two major debt industry groups, The National Foundation for Credit Counseling and Association of Independent Consumer Credit Counseling Agencies. Affiliation with one of these is no guarantee you have a good agency but these groups do have a set of standards which need to be followed, so it is a start. Are there large up front fees? The credit counseling agency will usually charge a small fee to set up your account. They then will charge a fee to administer your plan each month. If a large fee is required to begin your plan, watch out. Some companies have charged large up front fees and then disappeared with clients money. You need to be sure money you are paying is going to your debts and not being syphoned into pocket of your credit counselor. Can you really do that for me? Some credit counseling agencies make unrealistic promises. If statements made seem too good to be true, you need to pin them down. Settling your debts for little money or without harming your credit rating are not realistic. If they insist they can, ask for promises in writing. Chances are they will not be willing to do this if they cannot deliver. If they do put it into writing, at least then you will have something to use for evidence if legal action becomes necessary. Which of my creditors have you worked with in past? You have a list of your creditors. You want to compare it to creditors they have worked with in past. Have they been successful working with your creditors in reducing payments,lowering interest, and eliminating fees? You need to know not all creditors will work with credit counselors. If all, or most, of your creditors have, or will, you should investigate these services further. If not, credit counseling