AI
Sunday, June 01, 2003 11:44:47 AM
LG, (and all),
As many of you know, I've been doing quite a bit of work lately with variations on the summation index, and, with the kind assistance of poster "gtober," I think I am close to having something quite useful.
Some Background
To understand the summation index we must first understand the McClellen Oscillator, (on which it is based). To simplify things a bit, the McClellen Oscillator plots the difference between two moving averages of the percentage of stocks advancing (vs declining) on a given day. The Oscillator moves back and forth across the zero line, which is neutral. The idea is that when this percentage gets very high or very low the market is either overbought or oversold and hence likely to reverse soon.
The summation index uses the exact same data as the McClellen Oscillator, except that instead of plotting each day's number it adds them together continuously, i.e., today's McClellen Oscillator number is added to yesterday's Summation, etc.
For more info on the McOscillator and Summation Index, please see these pages at StockCharts.com and DecisionPoint.com.
http://stockcharts.com/education/Resources/Glossary/McClellanOscillator.html
http://stockcharts.com/education/Resources/Glossary/McClellanSumIndex.html
http://www.decisionpoint.com/Glossary/AboutMcOsi.html
My Project
I have taken the basic summation index idea a bit further, by creating summation indices from advancing/declining issues, advancing/declining volume, and new highs/new lows. In addition, I have combined these three basic summation indexes in all possible combinations to create seven different indexes, as follows:
-- issues only
-- volume only
-- new highs/lows only
-- issues & volume
-- issues & new highs/lows
-- volume & new highs/lows
-- issues, volume, & new highs/lows
Posted below are 18 charts of the various summation indexes plotted from 1984 through last Friday. The first four charts plot all seven indicators at once. The next seven charts each plot a single indicator over that same time period. The final seven charts each give a closer perspective on a single indicator by plotting it over roughly the last three years.
Any comments or suggestions would be most welcome.
TIA,
augie
COMPARISON OF SEVEN TYPES OF SUMMATION INDEXES
LONG-TERM CHARTS OF EACH TYPE
SHORT-TERM CLOSEUP CHARTS OF EACH TYPE
As many of you know, I've been doing quite a bit of work lately with variations on the summation index, and, with the kind assistance of poster "gtober," I think I am close to having something quite useful.
Some Background
To understand the summation index we must first understand the McClellen Oscillator, (on which it is based). To simplify things a bit, the McClellen Oscillator plots the difference between two moving averages of the percentage of stocks advancing (vs declining) on a given day. The Oscillator moves back and forth across the zero line, which is neutral. The idea is that when this percentage gets very high or very low the market is either overbought or oversold and hence likely to reverse soon.
The summation index uses the exact same data as the McClellen Oscillator, except that instead of plotting each day's number it adds them together continuously, i.e., today's McClellen Oscillator number is added to yesterday's Summation, etc.
For more info on the McOscillator and Summation Index, please see these pages at StockCharts.com and DecisionPoint.com.
http://stockcharts.com/education/Resources/Glossary/McClellanOscillator.html
http://stockcharts.com/education/Resources/Glossary/McClellanSumIndex.html
http://www.decisionpoint.com/Glossary/AboutMcOsi.html
My Project
I have taken the basic summation index idea a bit further, by creating summation indices from advancing/declining issues, advancing/declining volume, and new highs/new lows. In addition, I have combined these three basic summation indexes in all possible combinations to create seven different indexes, as follows:
-- issues only
-- volume only
-- new highs/lows only
-- issues & volume
-- issues & new highs/lows
-- volume & new highs/lows
-- issues, volume, & new highs/lows
Posted below are 18 charts of the various summation indexes plotted from 1984 through last Friday. The first four charts plot all seven indicators at once. The next seven charts each plot a single indicator over that same time period. The final seven charts each give a closer perspective on a single indicator by plotting it over roughly the last three years.
Any comments or suggestions would be most welcome.
TIA,
augie
COMPARISON OF SEVEN TYPES OF SUMMATION INDEXES
LONG-TERM CHARTS OF EACH TYPE
SHORT-TERM CLOSEUP CHARTS OF EACH TYPE
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