CoL1 Col. 2 Col. 3 Col. 4 Col. 5 Col.

6
Date Price EMA for Difference Exponent Col. 3 x Col. 2
Previous (Col. 1 Col. 4 ♦
Week ± Col. 2) ± Col. 5
EMA
Jan 2 121 120 +1.0 0.2 +.2 120.2
3 124 120.2 +3 8 0.2 +.8 121.0
4 123 121.0 +2.0 0.2 +.4 121.4
5 128 121.4 *e.e 0.2 +1.3 122.7

Table 5.5

Number of Weeks Exponent

5 0.4
10 0.2
15 0.13
20 0.1
40 0.05
80 0.025

the exponent 2 divided by 5 (0.4) will be twice as great, since 2 divided by 10

gives an exponent of 0.2.
Fortunately, most of us do not need to worry about making tedious
calculations because the computer now does it for us.

Interpretation

We discovered in chapter 3 that the magnitude of an ROC oscilla tion is, other
things being equal, a function of the time span under consideration. In other
words, the longer the span, the greater the swing and vice versa. A similar
principle applies to trend-deviation oscillators. The big difference here is that
the time span is a function of the length of the moving average. In this case, the
longer the average, the greater the fluctuation. Since the weighted and EMA
averages are more sensitive than a simple moving average, this also means that
the magnitude of the oscillations associated with them will be less than a
comparable time span. Moreover, their