Letters To S&C by Technical Analysis, Inc.
The article “Volume- Weighted Macd Histogram” by David Hawkins in the October 2009 issue is certainly well written and instructive. However, it fails to note that the Vwmacd was originally developed by Buff Dormeier, Cmt. His 2007 paper, “Price & Volume, Digging Deeper,” on volume-weighted moving averages, is available at:
The earliest reference to the Vwmacd actually appears to be in Bollinger On Bollinger Bands, John Bollinger’s excellent 2002 book. Bollinger attributes the idea to Dormeier in Chapter 18 and presents the formulas for the indicator. I believe at that time, Dormeier’s work was unpublished.
The field of technical analysis has a deep history. Dormeier’s work is a valuable addition to that, and David Hawkins demonstrates how to extend the original idea. They both deserve recognition in your magazine.