Broad Market Indicators

For MetaStock 9.0 (and higher) User’s Manual Version 1.0

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.................10 BM NASDAQ Advancing ........................................................................................................................3 BM Monetary 26 week T-bill yield Formula....................................7 BM Monetary Japanese Yen Formula ...................11 Contents • i ................................................................7 BM Monetary Prime Rate .......................................................................................................................................................................................................................................................................................................................................6 BM Monetary Euro Formula ............................................................................................................................................................................................6 BM Monetary Interest Rate ROC .............................................6 BM Monetary Gold / Silver Ratio...........................7 BM Monetary Prime Rate Formula ..................................................4 BM Monetary Composite Index Medium Term Formula...............................Declining Issues Formula......................................................................10 BM NASDAQ Advancing Issues .................................................................3 BM Monetary 13 week T-bill yield Formula...........................................10 BM NASDAQ Advance/Decline Ratio Formula......................10 BM NASDAQ Advance/Decline Ratio ................10 BM NASDAQ Advancing ................................................................................................................................................................9 BM NASDAQ Advance/Decline Line......................................................................................................................................................................6 BM Monetary Japanese Yen ......................................................................................................................Contents Broad Market Indicators BM Monetary Indicators 1 3 BM Monetary 13 week T-bill yield ....6 BM Monetary Gold / Silver Ratio Formula.................................................................................................................................6 BM Monetary Fed Funds Rate...........................................................................................................................Declining Issues ............................................................................................................7 BM NASDAQ Indicators 9 BM NASDAQ Absolute Breadth Index............4 BM Monetary Composite Index Medium Term .........................5 BM Monetary Euro ...........................................................................................7 BM Monetary T-bill Yield Spread Formula .................3 BM Monetary Composite Index Short Term ...........................................7 BM Monetary T-bill Yield Spread..................................................9 BM NASDAQ Advance/Decline Line Formula ......................................................................6 BM Monetary Interest Rate ROC Formula......................................3 BM Monetary Composite Index Short Term Formula...6 BM Monetary Fed Funds Rate Formula .....................9 BM NASDAQ Absolute Breadth Index Formula.........................3 BM Monetary 26 week T-bill yield ................................................

.....................................................................................................16 BM NASDAQ Negative Volume Index ...............................New Lows Ratio .......17 BM NASDAQ New Highs .....................................................................................................................................................17 BM NASDAQ New Highs ...............................11 BM NASDAQ Advancing Volume ...13 BM NASDAQ Composite Tape Index ...........................................................................................17 BM NASDAQ New Highs ...............................................19 BM NASDAQ Positive Volume Index ...........New Lows Formula ................................................15 BM NASDAQ Declining Issues .................................................................................................................................................................16 BM NASDAQ Negative Volume Index Formula.................................................................................................................................................19 BM NASDAQ Overbought/Oversold Formula ...................18 BM NASDAQ New Highs..............16 BM NASDAQ McClellan Summation Formula .............................................................................................................................................................Short Term...........................................................................................................................................................................................................................................................................................15 BM NASDAQ Declining Volume ..........................................................11 BM NASDAQ Changed Volume Formula .........................................17 BM NASDAQ New Highs ..............................................................................................19 BM NASDAQ Rate of Change (Percent) Formula.........12 BM NASDAQ Composite Tape Index .........................................................11 BM NASDAQ Breadth Thrust Formula ........................................................................................19 BM NASDAQ Rate of Change (Percent) ....................................................20 BM NASDAQ Rate of Change (Points) ............................................................19 BM NASDAQ Positive Volume Index Formula ...................16 BM NASDAQ New Highs .......................Short Term Formula .New Lows Ratio Formula......................New Lows Cumulative .........................................12 BM NASDAQ Composite Tape Index ........................................................New Lows .........................................................................................................15 BM NASDAQ Declining Volume Formula.....17 BM NASDAQ New Highs ............................................20 ii • Contents ...............................................11 BM NASDAQ Advancing Volume Formula........................Medium Term Formula .............................18 BM NASDAQ New Lows Formula............................................................................18 BM NASDAQ On Balance Volume Formula......................................14 BM NASDAQ Cumulative Volume Index Formula............................................................20 BM NASDAQ Rate of Change (Points) Formula....................................11 BM NASDAQ Changed Volume....................................18 BM NASDAQ On Balance Volume ....................................................15 BM NASDAQ MACD Formula ..................18 BM NASDAQ New Highs Formula ..............................................................Medium Term .............15 BM NASDAQ MACD..........16 BM NASDAQ McClellan Oscillator ........14 BM NASDAQ Cumulative Volume Index .BM NASDAQ Advancing Issues Formula...........................................................................................................................................................................20 BM NASDAQ Relative Strength Index ..................18 BM NASDAQ New Lows ..............................................................................................................New Lows Cumulative Formula.......12 BM NASDAQ Composite Tape Index .....................................18 BM NASDAQ Open-10 TRIN Formula.....................................................................18 BM NASDAQ Overbought/Oversold .........................15 BM NASDAQ Declining Issues Formula............................................................................................11 BM NASDAQ Breadth Thrust..........................................16 BM NASDAQ McClellan Summation..................................18 BM NASDAQ Open-10 TRIN .......................................................................................................................16 BM NASDAQ McClellan Oscillator Formula.............................................................................................................................

.............21 BM NASDAQ Arms Index (TRIN).........................28 BM NYSE Composite Tape Index .....................................................................................................................................................21 BM NASDAQ Stochastic Oscillator................21 BM NASDAQ Total Volume Formula..................................Declining Issues.......22 BM NASDAQ Upside/Downside Volume Formula........................31 BM NYSE MACD........................................27 BM NYSE Changed Volume Formula ................................................................................................................................Short Term ........................................................31 BM NYSE Declining Issues ..................30 BM NYSE Cumulative Volume Index .......................................................................................................31 BM NYSE Declining Volume Formula..............................................................32 BM NYSE McClellan Oscillator Formula........................................21 BM NASDAQ Arms Index (TRIN) Formula .............................31 BM NYSE Cumulative Volume Index Formula......................................................26 BM NYSE Advance/Decline Ratio......................................................................................................................................BM NASDAQ Relative Strength Index Formula .......................................................................27 BM NYSE Changed Volume......................................................................Medium Term ................................................................................Declining Issues Formula...................................................................22 BM NASDAQ Unchanged Volume................................................................................................................25 BM NYSE Absolute Breadth Index Formula ...............................25 BM NYSE Advance/Decline Line Formula ........26 BM NYSE Advancing ................................................22 BM NASDAQ Unchanged Volume Formula..........................................................31 BM NYSE Declining Issues Formula.................................................................................32 BM NYSE McClellan Oscillator ........................................................................27 BM NYSE Breadth Thrust Formula ..................27 BM NYSE Advancing Issues..................22 BM NASDAQ Upside/Downside Ratio ...............Medium Term Formula ........................................................................................................................................................................27 BM NYSE Advancing Volume Formula..........................................................27 BM NYSE Advancing Issues Formula.........................23 BM NYSE INDICATORS 25 BM NYSE Absolute Breadth Index................................31 BM NYSE MACD Formula ................................................................................................................................................21 BM NASDAQ Stochastic Oscillator Formula.........................................................................................................................................................................................................................29 BM NYSE Composite Tape Index ...................................................................................................................................................21 BM NASDAQ Total Volume ..................................................22 BM NASDAQ Upside/Downside Volume .................................................25 BM NYSE Advance/Decline Line...........................................................................................................20 BM NASDAQ STIX Formula ........................................................................................................................27 BM NYSE Advancing Volume...........................................................................................................................................................................................................32 Contents • iii .............28 BM NYSE Composite Tape Index ..........26 BM NYSE Advance/Decline Ratio Formula.....................................................................26 BM NYSE Advancing ..................................................Short Term Formula ..........31 BM NYSE Declining Volume ....................................................................................................................................................................22 BM NASDAQ Upside/Downside Ratio Formula..............................................20 BM NASDAQ STIX............28 BM NYSE Composite Tape Index ..................................................27 BM NYSE Breadth Thrust...............

...............................................................................34 BM NYSE On Balance Volume Formula................34 BM NYSE New Lows.............................BM NYSE McClellan Summation ..........................................36 BM NYSE Relative Strength Index ................................................................................................................................................................................................................................................34 BM NYSE Open-10 Arms Index ( TRIN) Formula ......35 BM NYSE Overbought/Oversold Formula ...36 BM NYSE STIX ...........................34 BM NYSE New Highs Formula .......36 BM NYSE Rate of Change (Points) Formula................35 BM NYSE Rate of Change (Percent)................................................................................New Lows ...36 BM NYSE Rate of Change (Points)........New Lows Cumulative...............................37 BM NYSE TRIN Formula ..........................33 BM NYSE New Highs .............................................................................................................................................34 BM NYSE New Highs....................................33 BM NYSE New Highs .................................37 BM NYSE Total Volume Formula ............38 BM NYSE Unchanged Volume Formula ..............................New Lows Ratio Formula....................38 BM NYSE Upside/Downside Ratio Formula ...............................................................................................New Lows Cumulative Formula ......................38 BM NYSE Upside/Downside Ratio...............................35 BM NYSE Positive Volume Index Formula..........................................................................................................................................................32 BM NYSE Negative Volume Index Formula ...........................................................................................................34 BM NYSE Open-10 Arms Index (TRIN) ...............................................................32 BM NYSE McClellan Summation Formula .................................................................................................................................................................................................................................................................................................................................................34 BM NYSE New Lows Formula....................................33 BM NYSE New Highs .............................38 BM NYSE Upside/Downside Volume Formula........................33 BM NYSE New Highs .............................32 BM NYSE New Highs .......................................................................................................................................................................36 BM NYSE Rate of Change (Percent) Formula...............................................................................................New Lows Ratio...................................................37 BM NYSE Stochastic Oscillator Formula ........................................................33 BM NYSE New Highs .............................................................................................................................................................................................................................................................35 BM NYSE Positive Volume Index .................................................................................39 iv • Contents ................................................................36 BM NYSE Relative Strength Index Formula .................................................37 BM NYSE Stochastic Oscillator ........................37 BM NYSE TRIN....................34 BM NYSE On Balance Volume .................................................................................................................................................................38 BM NYSE Unchanged Volume ...........................................................................................New Lows Formula ....................................................................35 BM NYSE Overbought/Oversold ..................................................38 BM NYSE Upside/Downside Volume..............................................................32 BM NYSE Negative Volume Index....................................................................................................37 BM NYSE Total Volume.................36 BM NYSE STIX Formula ..................................................................................................

combine together to give investors an overall view of the major conditions affecting the stock market. Other monetary indicators include the Japanese Yen. The two groups of indicators: momentum and monetary. These indicators quantify the movement (momentum) of the market itself and have a very strong correlation with changes in the stock market. Monetary indicators display monetary/interest rate conditions which affect the stock market. Market momentum indicators. 13 week T-Bills. up/down volume. the value of their stocks). The monetary indicators include four interest rates (the Prime Rate. and composite monetary models of these rates-of-change. Gold and Silver. or new highs/lows). and monetary. Swiss Franc.Broad Market Indicators Broad Market Indicators are divided into two broad groups inside MetaStock 9. Momentum indicators show what prices are actually doing. are typically based on either a market index (such as moving averages or rates-of-change) or breadth (indicators which use advancing/declining. the rates-of-change of these four interest rates. also referred to as tape indicators. the Federal Funds Rate. and 26 week T-Bills).0: market momentum. Broad Market Indicators • 1 . Monetary indicators are used to analyze changes in interest rates and global changes which have a direct impact on the profitability of American corporations (and thus.

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An increase in T-Bill yields is considered bearish for the stock market. BM Monetary Indicators • 3 . Conversely.000 to $1 million. the faster rates are falling. the CMI will drop below zero. An increase in T-Bill yields is considered bearish for the stock market.IRX". The short-term indicator puts less weight on the Prime Rate and uses a shorter moving average for smoothing.000 to $1 million. BM Monetary 13 week T-bill yield Formula Security("C:\MetaStock Data\BM Data\. the CMI will remain below zero.C) BM Monetary 26 week T-bill yield The bills sell at a discount from face value in units of $10. When interest rates are falling. readings above zero indicate that interest rates are rising. BM Monetary 26 week T-bill yield Formula Security("C:\MetaStock Data\BM Data\US6MT=RR". the faster rates are rising. As long as rates continue to fall.BM Monetary Indicators BM Monetary 13 week T-bill yield The bills sell at a discount from face value in units of $10.C) BM Monetary Composite Index Short Term BM Monetary Composite Index Short Term is designed to track monetary (interest rate) change and momentum. They provide a visual tool by which you can see the rate-of-change in a composite of interest rates. The further the CMI goes below zero. The CMI’s are designed to display changes in interest rates. The higher the CMI rises above zero.

p5:=Input("periods in Rate of Change".ROC(C.200. p2:=Input("Prime Rate ROC %".%))).0.25).C in indicator Prime Rate. This is because daily CMI’s use daily rates-of-change.%)))+ ((p3/100)*Security("C:\MetaStock Data\BM Data\.%)))+ ((p2/100)*Security("C:\MetaStock Data\BM Data\.p5.30).O.ROC(C. Mov(CMI. Here are the contents within the Short Term Indicator: CONTENTS (SHORT-TERM MONETARY INDICATOR): Fed Funds.100.E) BM Monetary Composite Index Medium Term BM Monetary Composite Index Medium Term is designed to track monetary (interest rate) change and momentum.p5. Rate-Of-Change % of 13 wk T-Bills in indicator 26 wk T-Bills.ROC(C.0.FFY".p5.%)))+ ((p4/100)*Security("C:\MetaStock Data\BM Data\US6MT=RR". Rate-Of-Change % of Fed Funds R.O.0. while weekly CMI’s use weekly rates-of-change.15). Rate-Of-Change % of Prime Rate R.1.100.0. p3:=Input("13 wk T'Bills ROC %". The CMIs are designed 4 • BM Monetary Indicators .100.40).p5.ROC(C.100. in indicator 13 wk T-Bills.200. CMI:=((p1/100)*Security("C:\MetaStock Data\BM Data\USPRIME=".p6.Note that the value of the monetary indicators will vary depending on if daily data or weekly data are displayed. Rate-Of-Change % of 26 wk T-Bills in indicator Exponential moving average days 13 30% 13 10% 13 30% 13 30% 15 BM Monetary Composite Index Short Term Formula p1:=Input("Fed Funds ROC %".1.IRX". p6:=Input("Exponential Moving Average periods".C. p4:=Input("26 wk T'Bills ROC %".13).10).

p6.C in indicator Prime Rate.to display changes in interest rates.ROC(C.25).%))). Rate-Of-Change % of Prime Rate R. readings above zero indicate that interest rates are rising.O.FFY".100. As long as rates continue to fall.p5.0.C.E) BM Monetary Indicators • 5 .25). Rate-Of-Change % of 13 wk T-Bills in indicator 26 wk T-Bills. p5:=Input("periods in Rate of Change". the CMI will drop below zero.ROC(C.100. the CMI will remain below zero.25). Rate-Of-Change % of Fed Funds R.ROC(C. p3:=Input("13 wk T'Bills ROC %".200. Conversely. When interest rates are falling. CMI:=((p1/100)*Security("C:\MetaStock Data\BM Data\USPRIME=".25). while weekly CMIs use weekly rates-of-change. This is because daily CMIs use daily rates-of-change.100.%)))+ ((p3/100)*Security("C:\MetaStock Data\BM Data\.0.p5.%)))+ ((p4/100)*Security("C:\MetaStock Data\BM Data\US6MT=RR".200.0.ROC(C. p2:=Input("Prime Rate ROC %".p5. p6:=Input("Exponential Moving Average periods". the faster rates are falling. They provide a visual tool by which you can see the rate-of-change in a composite of interest rates. Here are the contents of the Monetary Composite Index Medium Term indicator: Fed Funds.0.1. The higher the CMI rises above zero. in indicator 13 wk T-Bills.p5. The further the CMI goes below zero.25). Note that the value of the monetary indicators will vary depending on if daily data or weekly data are displayed. Mov(CMI. p4:=Input("26 wk T'Bills ROC %". Rate-Of-Change % of 26 wk T-Bills in indicator Exponential moving average days 13 25% 13 25% 13 25% 13 25% 25 BM Monetary Composite Index Medium Term Formula p1:=Input("Fed Funds ROC %".13).100.IRX".O.%)))+ ((p2/100)*Security("C:\MetaStock Data\BM Data\. the faster rates are rising.1.

If current rates are lower than rates x-days ago. It is calculated by subtracting the interest rate x-days (weeks) ago from the current rate.C. the economy will probably slow down (unless the current trend changes).O.C) BM Monetary Fed Funds Rate Banks with excess reserves can lend their reserves to banks with deficient reserves at the Federal Funds Market. indicators show how much an interest rate has changed over a specific time period.O. regardless of the level of current interest rates. However. The interest rate charged for these short (often just overnight) loans is called the Fed Funds Rate. 6 • BM Monetary Indicators . If the rate is higher today than x-days ago.C. but have been high for some time (thus. An increase in the Fed Funds rate is considered bearish for the stock market. an investor would expect the economy to continue as is. the R.0 charts the price of gold and silver (per ounce) as well as the Gold/Silver Ratio.O. indicator will be less than zero.00).O. If interest rates are high.S. BM Monetary Gold / Silver Ratio Formula Security("C:\MetaStock Data\BM Data\XAU-B-HH". dollar.C. the Rate-Of-Change would be near zero). indicator will be greater than zero. is 1.C)/ Security("C:\MetaStock Data\BM Data\XAG-HH".C. if rates have been climbing 1% every three months (the 12-week R. BM Monetary Euro Formula Security("C:\MetaStock Data\BM Data\EUR=".FFY". BM Monetary Interest Rate ROC Formula ir:=Input("which rate: 1=Fed Fund. The Rate-Of-Change of an interest rate shows the trend and direction of interest rates.C) BM Monetary Gold / Silver Ratio MetaStock 9.BM Monetary Euro This indicator displays the exchange rates of the Euro to the U. the R. BM Monetary Fed Funds Rate Formula Security("C:\MetaStock Data\BM Data\.C) BM Monetary Interest Rate ROC The Interest Rate R.

irpr:=Security("C:\MetaStock Data\BM Data\USPRIME=". Spread = (26 week T-bills Rate) .x. The spread between 13 week and 26 week T-Bills has averaged about 0.1.C) BM Monetary Indicators • 7 . it indicates that 13 week T-Bill rates are falling faster (or rising slower) than 26 week T-Bill rates. BM Monetary T-bill Yield Spread Formula Security("C:\MetaStock Data\BM Data\US6MT=RR".2. If(Int(ir)=1.2=Prime".FFY".21). This is generally bullish.C)Security("C:\MetaStock Data\BM Data\. When the spread narrows (is lower).$)) BM Monetary Japanese Yen These indicators display the exchange rates of the Japanese Yen to the U. banks charge their best corporate clients.1). BM Monetary Japanese Yen Formula Security(“C:\MetaStock Data\BM Data\JPY=”. This is generally bearish. An increase in the Prime Rate is considered bearish for the stock market.ROC(irff.IRX".C) BM Monetary T-bill Yield Spread The T-Bills Spread shows the difference between T-bills that will mature in 13 weeks and T-bills that mature in 26 weeks. x:=Input("time periods".ROC(irpr. BM Monetary Prime Rate Formula Security("C:\MetaStock Data\BM Data\USPRIME=".(13 week T-bills Rate) When the Spread between T-Bills rises. it indicates that 13 week T-Bill rates are rising faster (or falling slower) than 26 week T-Bill rates.C).S.x.$).1. irff:=Security("C:\MetaStock Data\BM Data\.1000.S.13% over the last several years.C) BM Monetary Prime Rate The Prime Rate is the interest rate U. dollar.C).

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the DJIA has BM NASDAQ Indicators • 9 .NASDA". with heavy swings in both directions. with low market activity. when a divergence develops between the DJIA and the A/D Line. By studying the trend of the A/D Line we can see if the market is in a rising or falling trend. It disregards market direction and shows only how much activity is taking place. When more stocks advance than decline.C) ) BM NASDAQ Advance/Decline Line The A/D Line is best used to measure overall market strength and market breadth. if 1. the ABI would be +700. if the trend is still intact. Another method of interpreting the A/D Line is to look for a divergence between the DJIA (or similar index) and the A/D Line. and how long the current trend has prevailed. market bottoms are generally dull. the ABI would still be +700. The ABI can be thought of as an "activity index. For example: If 1000 stocks advanced and 300 declined. Classic interpretation of the ABI is that market tops are generally active.BM NASDAQ Indicators BM NASDAQ Absolute Breadth Index The ABI shows market activity. BM NASDAQ Absolute Breadth Index Formula Abs(Security("C:\MetaStock Data\BM Data\X.NASD-D". the indicator moves up and vice versa.000 stocks declined and 300 advanced. similarly.C)Security("C:\MetaStock Data\BM Data\X." High readings indicate considerable market activity (and change) while low readings indicate lack of change. Often an end to a bull market can be forecast when the A/D Line begins to round over while the DJIA is still trying to make new highs. Many investors feel that the A/D Line shows market strength better than more commonly used indices such as the Dow Jones Industrial Average or the New York Stock Exchange Composite Index. Historically.

BM NASDAQ Advancing .. DCI:=Security("C:\MetaStock Data\BM Data\X. The higher the value. Both of these indicators show how stocks are performing on a daily basis. where the A/D Line is a cumulative total.NASDD".C)Security("C:\MetaStock Data\BM Data\X.Declining Issues Plotted by themselves. Likewise. that markets that appear to be extremely overbought or oversold may stay that way for some time.NASDA".corrected and gone the direction of the A/D Line. We suggest erasing the indicator and then plotting a short (10-day) moving average of the indicator.NASD-D".C). the number of advancing and the number of declining issues are very erratic charts.. But. Cum(ADI-DCI) BM NASDAQ Advance/Decline Ratio The A/D Ratio is similar to the A/D Line in that it displays market strength (tape action). Some questions to consider when analyzing the ADI or DCI are: Is the market making a new low while fewer and fewer stocks are declining? Is the downside selling pressure easing up? Are a record number of stocks declining? Has the 21-day moving average of the ADI turned up (or down)? Etc.NASD-A". When investing using overbought and oversold indicators.C) BM NASDAQ Advancing .C). it is wise to wait for the market to confirm your belief that a change is due before placing your trades. however.C) 10 • BM NASDAQ Indicators . low readings imply an oversold market and suggest a technical rally.C)/ Security("C:\MetaStock Data\BM Data\X.NASD-A". BM NASDAQ Advance/Decline Ratio Formula Security("C:\MetaStock Data\BM Data\X. the more "excessive" the rally and the more likely a correction will take place. the A/D Ratio is a daily ratio between the number of advancing issues and the number of declining issues.Declining Issues Formula Security("C:\MetaStock Data\BM Data\X. The A/D Ratio is often used as an overbought/oversold indicator. BM NASDAQ Advance/Decline Line Formula ADI:=Security("C:\MetaStock Data\BM Data\X. Keep in mind.NASD-D".

5% within a 10-day period.S) BM NASDAQ Changed Volume Changed volume refers to the volume of shares traded on the Nasdaq that either increased or decreased in price. A "Breadth Thrust" is said to have occurred when the Breadth Thrust indicator rises from below 40% to above 61. It is calculated by adding up-volume.NASD-A". It is calculated by adding upvolume to down-volume (or subtracting unchanged-volume from totalvolume). BM NASDAQ Advancing Volume Formula Security("C:\MetaStock Data\BM Data\X.C). by the number of advancing plus declining issues. is a momentum indicator. DCI:=Security("C:\MetaStock Data\BM Data\X.NASD-A". down-volume. It is calculated by dividing a 10-day moving average of the number of advancing issues.C) BM NASDAQ Advancing Volume This indicator displays the advancing volume on the Nasdaq. Mov(ADI/(ADI+DCI). BM NASDAQ Breadth Thrust Formula ADI:=Security("C:\MetaStock Data\BM Data\X. Total volume refers to the total volume of shares traded on the Nasdaq. developed by Dr. Both of these indicators are basically a line chart of daily Nasdaq volume. When a "Thrust" occurs.NASDD". the market has rapidly changed from an oversold condition to one of strength (but is not yet overbought).V) BM NASDAQ Breadth Thrust The Breadth Thrust indicator.C). and unchangedvolume together.NASDA".10. BM NASDAQ Advancing Issues Formula Security("C:\MetaStock Data\BM Data\X.BM NASDAQ Advancing Issues This indicator displays the number of advancing issues on the Nasdaq. BM NASDAQ Indicators • 11 . Martin Zweig.

100. the values will be different than if plotted using weekly data. Because the CTI displays market strength (momentum). p2:=Input("New Highs and New Lows %". One method (refer to example) of determining the trend is to wait for the Trend Indicator to enter the overbought/oversold zones (±100ish) and then rise/fall from these levels. In the following discussion.BM NASDAQ Changed Volume Formula Security("C:\MetaStock Data\BM Data\X. The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed.100.0. it tends to stay in it for some time.30). or any time the indicator falls below -100. it tends to be a trend-following indicator. when the CTI is plotted using daily data. Buy signals are given when the indicator falls below -100 and then rises above -100.0. we want to be short. but we would rather follow behind by a few days than "fight the tape. And once the trend is broken. The following analysis refers specifically to daily data and short-to-medium term trading.. Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero. although the interpretation of the weekly CTI would be very similar. Thus. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values. we want to be long.O.V) BM NASDAQ Composite Tape Index . p3:=Input("Up Volume and Down Volume 12 • BM NASDAQ Indicators .NASD-U".Medium Term The CTI shows market strength and direction. When the CTI is in a falling trend." Once the CTI forms a trend.V)Security("C:\MetaStock Data\BM Data\X.g.25). or any time the indicator rises above +100. sell signals are generated when the indicator rises above +100 and then falls below +100. When the CTI is in a rising trend (indicating market strength). Note. we assume that the NYSE index has been selected as the market index. BM NASDAQ Composite Tape Index . Likewise.C. the CTI will be different depending on which market index is plotted (e.Medium Term Formula p1:=Input("Advancing and Declining Issues %". the DJIA or the S&P 500). Because the CTI is a composite of several different momentum indicators. The indicator can be used to anticipate market moves.NASD-V". Also note that the CTI uses the market index values to calculate the R. it is not as subject to false readings and whipsaws as a single indicator. it is usually broken for good and a new trend is established.

although the interpretation of the weekly CTI would be very similar. it is usually broken for good and a new trend is established. NNL:=Security("C:\MetaStock L". but we would rather follow behind by a few days than "fight the tape. Data\BM Data\X. it tends to be a trend-following indicator.200.12). The indicator can be used to anticipate market moves." Once the CTI forms a trend.. Because the CTI displays market strength (momentum). The following analysis refers specifically to daily data and short-to-medium term trading. In the following discussion.0.20).O. MKT:=Security("C:\MetaStock Data\.NASDData\BM Data\X. When the CTI is in a rising trend (indicating market strength). When the CTI is in a falling trend.200.IXIC". the DJIA or the S&P 500).p4. Thus. we want to be long. ADI:=Security("C:\MetaStock Data\BM Data\.25). p5:=Input("Rate of Change %". that when the CTI is plotted using daily data.1.NASDData\BM Data\X.C).%".12).100. Because the CTI is a composite of several different momentum indicators.C). Mov(CTI. it is not as subject to false readings and whipsaws BM NASDAQ Indicators • 13 . USV:=Security("C:\MetaStock Data\BM Data\X.5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0.5)*100)*(p3/100) + ROC(MKT.0. Also note that the CTI uses the market index values to calculate the R. DSV:=Security("C:\MetaStock D". the values will be different than if plotted using weekly data.100. NNH:=Security("C:\MetaStock H". p6:=Input("Exponential Moving Average periods".p6.5)*100)*(p2/100) + (((USV/(USV+DSV))-0. we want to be short.V).C. we assume that the NYSE index has been selected as the market index.C).%)*(p5/100).NASDData\BM CTI:=(((ADI/(ADI+DCI))-0. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values.E) BM NASDAQ Composite Tape Index .NASDA". And once the trend is broken. Note.V). the CTI will be different depending on which market index is plotted (e.1.Short Term The CTI shows market strength and direction. p4:=Input("periods in Rate of Change".C).g.NASDA". it tends to stay in it for some time.

0.0.10). DSV:=Security("C:\MetaStock Data\BM Data\X.100. The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed.5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0.5)*100)*(p2/100) + (((USV/(USV+DSV))-0. One method (refer to example) of determining the trend is to wait for the Trend Indicator to enter the overbought/oversold zones (±100ish) and then rise/fall from these levels. Buy signals are given when the indicator falls below -100 and then rises above -100.25). p4:=Input("periods in Rate of Change".12).NASDL".5)*100)*(p3/100) + ROC(MKT.C).1.100.E) BM NASDAQ Cumulative Volume Index The Cumulative Volume Index (CVI) is a cumulative total of the difference between up-volume and down-volume.p6. BM NASDAQ Composite Tape Index .%)*(p5/100). p2:=Input("New Highs and New Lows %".C).NASDA". or any time the indicator falls below -100. Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero.40). NNL:=Security("C:\MetaStock Data\BM Data\X. NNH:=Security("C:\MetaStock Data\BM Data\X.V).10). DCI:=Security("C:\MetaStock Data\BM Data\X. USV:=Security("C:\MetaStock Data\BM Data\X.V).NASDA".100.100.NASDD".200.as a single indicator. Likewise. It is calculated by 14 • BM NASDAQ Indicators .C).1. Mov(CTI.NASDD".C).Short Term Formula p1:=Input("Advancing and Declining Issues %".0. p5:=Input("Rate of Change %". CTI:=(((ADI/(ADI+DCI))-0. p3:=Input("Up Volume and Down Volume %". MKT:=Security("C:\MetaStock Data\BM Data\.200. ADI:=Security("C:\MetaStock Data\BM Data\X.p4.25). or any time the indicator rises above +100. sell signals are generated when the indicator rises above +100 and then falls below +100. p6:=Input("Exponential Moving Average periods".0.NASDH".C).IXIC".

and rightly so.V) BM NASDAQ MACD The MACD ("Moving Average Convergence/Divergence") is a trend following momentum indicator that shows the relationship between two moving averages of prices.NASD-D". and today there were 24 million shares of up-volume and 40 million shares of down-volume. a mathematical analysis of the market index's average value over a predetermined time period is made. that the average changes or moves. BM NASDAQ Declining Issues Formula Security("C:\MetaStock Data\BM Data\X.V).NASD-D".adding the volume of advancing stocks and subtracting the volume of declining stocks from a running total. BM NASDAQ Cumulative Volume Index Formula USV:=Security("C:\MetaStock Data\BM Data\X.NASDD".C) BM NASDAQ Declining Volume This indicator will determine the declining volume on the Nasdaq. over a period of time. A moving average is a method of calculating the average value of a market index. A sell signal is generated when the market index's price falls below its moving average and a buy signal is generated when the market index's price rises above its moving BM NASDAQ Indicators • 15 . The term moving implies. For example: If the value of the CVI was 400 million yesterday.NASDA". or indicator. security.V). The most popular method of interpreting a moving average is to compare the relationship of the moving average of a market index's closing price to the market index's closing price itself. When calculating a moving average. the CVI today would be 384 million. BM NASDAQ Declining Volume Formula Security("C:\MetaStock Data\BM Data\X. Cum(USV-DSV) BM NASDAQ Declining Issues This indicator will determine how many declining issues there are on the Nasdaq. DSV:=Security("C:\MetaStock Data\BM Data\X. its average also moves up or down. As the index changes over time.

E)-Mov(ADI-DCI.1. Cum(If(ROC(TVO. DCI:=Security("C:\MetaStock Data\BM Data\X.$)<0. ROC(MKT.V).NASDV". BM NASDAQ Negative Volume Index The Negative Volume Index (NVI) relates a drop in volume to the change in the market index's price.MACD()) BM NASDAQ McClellan Oscillator The McClellan Oscillator is the difference between a 10% (19-day) and a 5% (39-day) exponential moving average of advancing minus declining issues. Mov(ADI-DCI. BM NASDAQ McClellan Summation Formula ADI:=Security("C:\MetaStock Data\BM Data\X.1. BM NASDAQ Negative Volume Index Formula MKT:=Security("C:\MetaStock Data\BM Data\.E) BM NASDAQ McClellan Summation The McClellan Summation Index is a cumulative total of the McClellan Oscillator values.C).C).0)) 16 • BM NASDAQ Indicators .NASDD". When volume decreases from the previous day (or week).39. BM NASDAQ MACD Formula Security("C:\MetaStock Data\BM Data\.IXIC".$)/(Ref(MKT. DCI:=Security("C:\MetaStock Data\BM Data\X. the NVI is adjusted by the percentage that the market index's price changed.average.NASDD".NASDA".NASDA".C).19.1)/1000). BM NASDAQ McClellan Oscillator Formula ADI:=Security("C:\MetaStock Data\BM Data\X.IXIC". TVO:=Security("C:\MetaStock Data\BM Data\X.C).C).

NASDL". NNL:=Security("C:\MetaStock Data\BM Data\X.NASDH".New Lows Ratio Formula NNH:=Security("C:\MetaStock Data\BM Data\X. The interpretation of this indicator is similar to the advance/decline line in that divergences can often be seen where the new highs-lows cumulative fails to confirm the market index's new high.NASDH".C).C). Cum(NNH-NNL) BM NASDAQ New Highs . As a market turns up from the major bottom. the indicator moves up rapidly.NASDL". High readings indicate that a large number of stocks are making new highs (compared to the number of stocks making new lows).New Lows Cumulative The New Highs-Lows Cumulative indicator is a cumulative total of the number of new highs and new lows. yet the market indices continue to reach new highs. a divergence often occurs as fewer and fewer stocks are making new highs (the New Highs-Lows falls).) As the cycle matures.New Lows Cumulative Formula NNH:=Security("C:\MetaStock Data\BM Data\X. BM NASDAQ New Highs . BM NASDAQ New Highs . NNH/NNL BM NASDAQ New Highs . Readings less than one indicate that the number of stocks making new highs is less than the number of stocks making lows. NNL:=Security("C:\MetaStock Data\BM Data\X.BM NASDAQ New Highs .New Lows This indicator displays the daily difference between the number of new highs and the number of new lows.C).C). BM NASDAQ Indicators • 17 . The indicator generally reaches its extreme lows slightly before a major market bottom. (Many new stocks are making new highs because it's easy to make a new high when prices have been depressed for a long time.New Lows Ratio The high/low ratio is another useful method to visualize the relationship of stocks that are making new highs/lows.

Readings above 0.NASD-H".IXIC".0))) BM NASDAQ Open-10 TRIN The interpretation of Open-10 TRIN (also called the Open Trading Index) is similar to the interpretation of the "normal" TRIN. BM NASDAQ On Balance Volume Formula MKT:=Security("C:\MetaStock Data\BM Data\.1.C) BM NASDAQ On Balance Volume On Balance Volume (OBV) relates volume to price change.C).$)<0. If(ROC(MKT.V).NASD-H". Cum(If(ROC(MKT.90 are considered bullish. BM NASDAQ New Lows Formula Security("C:\MetaStock Data\BM Data\X. TVO:=Security("C:\MetaStock Data\BM Data\X. BM NASDAQ New Highs Formula Security("C:\MetaStock Data\BM Data\X.$)>0.NASD-L".C) BM NASDAQ New Highs This indicator will show number of securities that hit a new high on the Nasdaq.NASDV".New Lows Formula Security("C:\MetaStock Data\BM Data\X. BM NASDAQ Open-10 TRIN Formula ADI:=Security("C:\MetaStock Data\BM Data\X. TVO.C)Security("C:\MetaStock Data\BM Data\X.BM NASDAQ New Highs .NASD-L". It is calculated by adding the volume for the day to a cumulative total when the market closes up. and subtracting the day's volume when the market closes down.NASD18 • BM NASDAQ Indicators .Neg(TVO).1.C) BM NASDAQ New Lows This indicator will show number of securities that hit a new low on the Nasdaq.90 are generally considered bearish and readings below 0.

IXIC".$)>0.10)/Sum(DSV.NASDA". BM NASDAQ Overbought/Oversold Formula ADI:=Security("C:\MetaStock Data\BM Data\X.V). TVO:=Security("C:\MetaStock Data\BM Data\X. DCI:=Security("C:\MetaStock Data\BM Data\X.1.NASDD".10))/ (Sum(USV. (Sum(ADI.C). When volume increases from the previous day (or week). Mov(ADI-DCI.NASDV".$)/(Ref(MKT. Cum(If(ROC(TVO.1.10.10)) BM NASDAQ Overbought/Oversold The OB/OS indicator is designed to show when the stock market is overbought (and a correction is due) and when it is oversold (and a rally is due).NASDD".0)) BM NASDAQ Rate of Change (Percent) This indicator will plot the Rate of Change as a percent on a security BM NASDAQ Indicators • 19 . DCI:=Security("C:\MetaStock Data\BM Data\X.C).NASDD". DSV:=Security("C:\MetaStock Data\BM Data\X.10)/Sum(DCI. USV:=Security("C:\MetaStock Data\BM Data\X. BM NASDAQ Positive Volume Index Formula MKT:=Security("C:\MetaStock Data\BM Data\.1)/1000).NASDA".C).C). ROC(MKT.V).A". Readings above +200 are generally considered bearish and readings below -200 are generally considered bullish. the PVI is adjusted by the percentage that the market index's price changed.C).V).E) BM NASDAQ Positive Volume Index The Positive Volume Index (PVI) relates an increase in volume to the change in the market index's price.

Since that time. but the RSI is failing to surpass its previous high.200.2. 20 • BM NASDAQ Indicators . BM NASDAQ Rate of Change (Percent) Formula x:=Input("number of periods:".ROC(C. A popular method by which to analyze the RSI is to look for a divergence wherein the market index is making new a high. The oscillator is a 21-day (9%) exponential moving average of the Advance/Decline Ratio.200.IXIC". it is said to have completed a failure swing.2. When Wilder introduced the RSI. he recommended using a 14-day RSI. When the RSI then turns down and falls below its most recent trough.x.within the Nasdaq.14).200. This divergence would be an indication of an impending reversal.x.12). but rather the internal strength of a single index. Security("C:\MetaStock Data\BM Data\.12).2. the 9-day and 25-day RSI’s have also gained popularity. The failure swing would be considered a confirmation of an impending reversal. The RSI is a price-following oscillator that ranges between 0 and 100. A more appropriate name might be Internal Strength Index. BM NASDAQ Rate of Change (Points) Formula x:=Input("number of periods:".%)) BM NASDAQ Rate of Change (Points) This indicator will plot the Rate of Change as a point on a security within the Nasdaq.IXIC". Security("C:\MetaStock Data\BM Data\.IXIC".$)) BM NASDAQ Relative Strength Index The name Relative Strength Index is slightly misleading as the RSI does not compare the relative strength of two market indices.ROC(C.RSI(x)) BM NASDAQ STIX STIX is a short-term trading oscillator. Security("C:\MetaStock Data\BM Data\. BM NASDAQ Relative Strength Index Formula x:=Input("number of periods:".

the short-term Trading Index.y)) BM NASDAQ Total Volume This indicator will plot the total volume of the Nasdaq.NASD-V". The most popular combination is to select a 5-day %K with 3-day %K slowing. The TRIN index is a short-term trading tool.3). DCI:=Security("C:\MetaStock Data\BM Data\X.E) BM NASDAQ Stochastic Oscillator The Stochastic Oscillator compares where a market index's price closed relative to its trading range over the last x-days Stochastic Oscillators can be used as both short and intermediate-term trading oscillators. A reading of 0% shows that the market index's close today was the lowest price that the index has closed at during the last x-days.BM NASDAQ STIX Formula ADI:=Security("C:\MetaStock Data\BM Data\X.21. shows the relationship between advancing/declining issues and advancing/declining (up/down) volume. BM NASDAQ Total Volume Formula Security("C:\MetaStock Data\BM Data\X. y:=Input("number of periods for %k slowing:". it is popular to also display a short-term moving average of the oscillator. BM NASDAQ Stochastic Oscillator Formula x:=Input("number of periods for %k:".C).5).V) BM NASDAQ Arms Index (TRIN) TRIN. A reading of 100% shows that the index's close today was the highest price that the index has closed at during the last x-days. Security("C:\MetaStock Data\BM Data\. Mov((ADI/(ADI+DCI))*100. TRIN shows if volume is flowing into advancing or declining stocks. In effect.200.200. depending on the number of days used when calculating the oscillator.Stoch(x. Stochastic Oscillators always range between 0% and 100%.2.NASDD".C). It is calculated by dividing the advance/decline ratio by the up/down volume ratio. When displaying a very short-term Stochastic Oscillator.NASDA". it shows how BM NASDAQ Indicators • 21 .IXIC".1.

NASD-U". Likewise a reading of -40 would indicate that down-volume exceeded up-volume by 40 million shares. the index will fall. BM NASDAQ Unchanged Volume Formula Security("C:\MetaStock Data\BM Data\X.V) BM NASDAQ Upside/Downside Ratio The Upside/Downside Ratio.NASD- BM NASDAQ Unchanged Volume This indicator will show all securities with unchanged volume on the Nasdaq.NASD-D". It is calculated by dividing the daily up-volume by the daily down-volume.NASDData\BM Data\X. DCI:=Security("C:\MetaStock D".NASD-A". 22 • BM NASDAQ Indicators . Currently.NASDData\BM Data\X.NASDData\BM Data\X. If more volume is associated with advancing stocks than declining stocks.C). USV:=Security("C:\MetaStock A".0. Very active days exceed ±150 million shares (the October. BM NASDAQ Upside/Downside Ratio Formula Security("C:\MetaStock Data\BM Data\X.V). TRIN is considered bullish when it is below 1.V)/ Security("C:\MetaStock Data\BM Data\X.0 and bearish when it is above 1.V). (ADI/DCI)/(USV/DSV) Data\BM Data\X.V) BM NASDAQ Upside/Downside Volume The Upside-Downside volume indicator shows the net flow of volume into or out-of the market. A reading of +40 million indicates that upvolume exceeded down-volume by 40 million shares.C).much volume is associated with each issue. as its name implies. BM NASDAQ Arms Index (TRIN) Formula ADI:=Security("C:\MetaStock A". DSV:=Security("C:\MetaStock D". The indicator is useful to compare today's volume action with previous days. 1987 crash reached -602). normal readings are in the area of ±50 million. shows the relationship between up-volume and down-volume.

V) BM NASDAQ Indicators • 23 .V)Security("C:\MetaStock Data\BM Data\X.NASD-A".NASD-D".BM NASDAQ Upside/Downside Volume Formula Security("C:\MetaStock Data\BM Data\X.

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with low market activity. Historically. the indicator moves up and vice versa. the ABI would be +700. Another method of interpreting the A/D Line is to look for a divergence between the DJIA (or similar index) and the A/D Line. When more stocks advance than decline.BM NYSE INDICATORS BM NYSE Absolute Breadth Index The ABI shows market activity. Classic interpretation of the ABI is that market tops are generally active. BM NYSE Absolute Breadth Index Formula Abs(Security("C:\MetaStock Data\BM Data\X. The ABI can be thought of as an "activity index. the DJIA has BM NYSE INDICATORS • 25 .000 stocks declined and 300 advanced. similarly. if 1." High readings indicate considerable market activity (and change) while low readings indicate lack of change.C)Security("C:\MetaStock Data\BM Data\X. Many investors feel that the A/D Line shows market strength better than more commonly used indices such as the Dow Jones Industrial Average or the New York Stock Exchange Composite Index. and how long the current trend has prevailed.C) ) BM NYSE Advance/Decline Line The A/D Line is best used to measure overall market strength and market breadth.NASDA".NASD-D". It disregards market direction and shows only how much activity is taking place. when a divergence develops between the DJIA and the A/D Line. By studying the trend of the A/D Line we can see if the market is in a rising or falling trend. with heavy swings in both directions. if the trend is still intact. Often an end to a bull market can be forecast when the A/D Line begins to round over while the DJIA is still trying to make new highs. market bottoms are generally dull. the ABI would still be +700. For example: If 1000 stocks advanced and 300 declined.

BM NYSE Advance/Decline Line Formula ADI:=Security("C:\MetaStock Data\BM Data\X.Declining Issues Plotted by themselves. But.NASD-A".. however.NASDA". BM NYSE Advance/Decline Ratio Formula Security("C:\MetaStock Data\BM Data\X. The A/D Ratio is often used as an overbought/oversold indicator.NASDD". Some questions to consider when analyzing the ADI or DCI are: Is the market making a new low while fewer and fewer stocks are declining? Is the downside selling pressure easing up? Are a record number of stocks declining? Has the 21-day moving average of the ADI turned up (or down)? Etc.C). Both of these indicators show how stocks are performing on a daily basis.corrected and gone the direction of the A/D Line. 26 • BM NYSE INDICATORS . the more "excessive" the rally and the more likely a correction. it is wise to wait for the market to confirm your belief that a change is due before placing your trades..C). where the A/D Line is a cumulative total. Likewise. When investing using overbought and oversold indicators. Cum(ADI-DCI) BM NYSE Advance/Decline Ratio The A/D Ratio is similar to the A/D Line in that it displays market strength (tape action).C)/ Security("C:\MetaStock Data\BM Data\X. Keep in mind. that markets that appear to be extremely overbought or oversold may stay that way for some time. the A/D Ratio is a daily ratio between the number of advancing issues and the number of declining issues. DCI:=Security("C:\MetaStock Data\BM Data\X. The following chart shows the smoothing effects of a 21-day moving average. Note how the number of advancing issues dropped off from their previous highs before the market began to turn down (vertical line labeled "A").NASD-D". The higher the value. low readings imply an oversold market and suggest a technical rally. We suggest erasing the indicator and then plotting a short (10-day) moving average of the indicator.C) BM NYSE Advancing . the number of advancing and the number of declining issues are very erratic charts.

A "Breadth Thrust" is said to have occurred when the Breadth Thrust indicator rises from below 40% to above 61.C). It is calculated by dividing a 10-day moving average of the number of advancing issues.NASD-A".BM NYSE Advancing . and unchangedvolume together. BM NYSE Advancing Volume Formula Security("C:\MetaStock Data\BM Data\X. by the number of advancing plus declining issues.C)Security("C:\MetaStock Data\BM Data\X.S) BM NYSE Changed Volume Changed volume refers to the volume of shares traded on the Nasdaq that either increased or decreased in price. BM NYSE Breadth Thrust Formula ADI:=Security("C:\MetaStock Data\BM Data\X. DCI:=Security("C:\MetaStock Data\BM Data\X.NASD-A". It is calculated by adding upvolume to down-volume (or subtracting unchanged-volume from totalvolume). BM NYSE Advancing Issues Formula Security("C:\MetaStock Data\BM Data\X.Declining Issues Formula Security("C:\MetaStock Data\BM Data\X.C) BM NYSE Advancing Volume This indicator displays the advancing volume on the Nasdaq. the market has rapidly changed from an oversold condition to one of strength (but is not yet overbought).NASDD". Total volume refers to the total volume of shares traded on the Nasdaq.NASD-D". Mov(ADI/(ADI+DCI). It is calculated by adding up-volume.10.V) BM NYSE Breadth Thrust The Breadth Thrust indicator.NASDA". developed by Dr. is a momentum indicator. down-volume.5% within a 10-day period.NASD-A".C). BM NYSE INDICATORS • 27 .C) BM NYSE Advancing Issues This indicator displays the number of advancing issues on the Nasdaq. Martin Zweig. When a "Thrust" occurs.

Note that when the CTI is plotted using daily data. the values will be different than if plotted using weekly data. although the interpretation of the weekly CTI would be very similar. The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed. Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero. BM NYSE Composite Tape Index .NASD-U". BM NYSE Changed Volume Formula Security("C:\MetaStock Data\BM Data\X. but we would rather follow behind by a few days than "fight the tape.O. And once the trend is broken.Medium Term Formula p1:=Input("Advancing and Declining Issues 28 • BM NYSE INDICATORS . it is not as subject to false readings and whipsaws as a single indicator. Thus. Also note that the CTI uses the market index values to calculate the R.Both of these indicators are basically a line chart of daily Nasdaq volume. Buy signals are given when the indicator falls below -100 and then rises above -100.g. The indicator can be used to anticipate market moves.C. the CTI will be different depending on which market index is plotted (e. it tends to stay in it for some time. it tends to be a trend-following indicator. or any time the indicator falls below -100. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values. When the CTI is in a rising trend (indicating market strength). or any time the indicator rises above +100. we want to be long.. In the following discussion. Because the CTI displays market strength (momentum). the DJIA or the S&P 500). it is usually broken for good and a new trend is established. Likewise.NASD-V".V) BM NYSE Composite Tape Index . Because the CTI is a composite of several different momentum indicators." Once the CTI forms a trend. we want to be short. sell signals are generated when the indicator rises above +100 and then falls below +100.V)Security("C:\MetaStock Data\BM Data\X. One method (refer to example) of determining the trend is to wait for the Trend Indicator to enter the overbought/oversold zones (±100ish) and then rise/fall from these levels. The following analysis refers specifically to daily data and short-to-medium term trading.Medium Term The CTI shows market strength and direction. When the CTI is in a falling trend. we assume that the NYSE index has been selected as the market index.

C).0.25). Mov(CTI.V).NASDA". ADI:=Security("C:\MetaStock Data\BM Data\.5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0.%)*(p5/100). p5:=Input("Rate of Change %". we want to be long. p2:=Input("New Highs and New Lows %". NNH:=Security("C:\MetaStock H".NASDData\BM Data\X. When the CTI is in a rising trend (indicating market strength).200. Also note that the CTI uses the market index values to calculate the R.g.p6.20).NASDA".C).%". USV:=Security("C:\MetaStock Data\BM Data\X. Data\BM Data\X.C.p4. it tends to be a trend-following indicator. DSV:=Security("C:\MetaStock D". p6:=Input("Exponential Moving Average periods". Because the CTI displays market strength (momentum).C).C). Thus.O. And BM NYSE INDICATORS • 29 .100. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values.Short Term The CTI shows market strength and direction. p4:=Input("periods in Rate of Change".0..1.V). the CTI will be different depending on which market index is plotted (e. The indicator can be used to anticipate market moves.0. we assume that the NYSE index has been selected as the market index." Once the CTI forms a trend. we want to be short. although the interpretation of the weekly CTI would be very similar.E) BM NYSE Composite Tape Index . MKT:=Security("C:\MetaStock Data\.12). p3:=Input("Up Volume and Down Volume %".NASDData\BM CTI:=(((ADI/(ADI+DCI))-0. In the following discussion.200.100.5)*100)*(p3/100) + ROC(MKT. The following analysis refers specifically to daily data and short-to-medium term trading. the DJIA or the S&P 500). the values will be different than if plotted using weekly data.0. Note that when the CTI is plotted using daily data.100.5)*100)*(p2/100) + (((USV/(USV+DSV))-0.1.100. it tends to stay in it for some time.25).12). When the CTI is in a falling trend.NASDData\BM Data\X.IXIC". but we would rather follow behind by a few days than "fight the tape.30). NNL:=Security("C:\MetaStock L".

100.100.5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0.C). CTI:=(((ADI/(ADI+DCI))-0.Short Term Formula p1:=Input("Advancing and Declining Issues %".200.C). Buy signals are given when the indicator falls below -100 and then rises above -100.0.10).100. p3:=Input("Up Volume and Down Volume %". NNH:=Security("C:\MetaStock Data\BM Data\X. The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed.0.0.NASDD".12).NASDD".V). Likewise. p4:=Input("periods in Rate of Change".1. Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero. DSV:=Security("C:\MetaStock Data\BM Data\X. it is not as subject to false readings and whipsaws as a single indicator.once the trend is broken.1.C).%)*(p5/100). p2:=Input("New Highs and New Lows %".0. ADI:=Security("C:\MetaStock Data\BM Data\X.IXIC".5)*100)*(p2/100) + (((USV/(USV+DSV))-0. USV:=Security("C:\MetaStock Data\BM Data\X. DCI:=Security("C:\MetaStock Data\BM Data\X.V).40).5)*100)*(p3/100) + ROC(MKT.NASDA". BM NYSE Composite Tape Index .100.NASDH".200.25). One method (refer to example) of determining the trend is to wait for the Trend Indicator to enter the overbought/oversold zones (±100ish) and then rise/fall from these levels. NNL:=Security("C:\MetaStock Data\BM Data\X.NASDL". it is usually broken for good and a new trend is established.NASDA". MKT:=Security("C:\MetaStock Data\BM Data\. sell signals are generated when the indicator rises above +100 and then falls below +100. Mov(CTI.p4. Because the CTI is a composite of several different momentum indicators. p6:=Input("Exponential Moving Average periods".25).C).C). or any time the indicator falls below -100.p6.E) 30 • BM NYSE INDICATORS . or any time the indicator rises above +100. p5:=Input("Rate of Change %".10).

C) BM NYSE Declining Volume This indicator will determine the declining volume on the Nasdaq. The most popular method of interpreting a moving average is to compare BM NYSE INDICATORS • 31 . a mathematical analysis of the market index's average value over a predetermined time period is made.V).V) BM NYSE MACD The MACD ("Moving Average Convergence/Divergence") is a trend following momentum indicator that shows the relationship between two moving averages of prices. and rightly so. the CVI today would be 384 million.BM NYSE Cumulative Volume Index The Cumulative Volume Index (CVI) is a cumulative total of the difference between up-volume and down-volume. BM NYSE Declining Issues Formula Security("C:\MetaStock Data\BM Data\X.NASD-D".NASDA".NASD-D". It is calculated by adding the volume of advancing stocks and subtracting the volume of declining stocks from a running total. When calculating a moving average. The term moving implies. BM NYSE Cumulative Volume Index Formula USV:=Security("C:\MetaStock Data\BM Data\X. over a period of time. A moving average is a method of calculating the average value of a market index. For example: If the value of the CVI was 400 million yesterday.NASDD". and today there were 24 million shares of up-volume and 40 million shares of down-volume. DSV:=Security("C:\MetaStock Data\BM Data\X. security. that the average changes or moves. BM NYSE Declining Volume Formula Security("C:\MetaStock Data\BM Data\X. or indicator. Cum(USV-DSV) BM NYSE Declining Issues This indicator will determine how many declining issues there are on the Nasdaq. As the index changes over time. its average also moves up or down.V).

BM NYSE Negative Volume Index Formula MKT:=Security("C:\MetaStock Data\BM Data\.NASDA".the relationship of the moving average of a market index's closing price to the market index's closing price itself.19.C). the NVI is adjusted by the percentage that the market index's price changed.E)-Mov(ADI-DCI. BM NYSE Negative Volume Index The Negative Volume Index (NVI) relates a drop in volume to the change in the market index's price.IXIC". DCI:=Security("C:\MetaStock Data\BM Data\X. BM NYSE McClellan Summation Formula ADI:=Security("C:\MetaStock Data\BM Data\X.C).NASDA".NASDD".IXIC".MACD()) BM NYSE McClellan Oscillator The McClellan Oscillator is the difference between a 10% (19-day) and a 5% (39-day) exponential moving average of advancing minus declining issues.C).C).39. BM NYSE McClellan Oscillator Formula ADI:=Security("C:\MetaStock Data\BM Data\X. DCI:=Security("C:\MetaStock Data\BM Data\X. TVO:=Security("C:\MetaStock Data\BM Data\X. BM NYSE MACD Formula Security("C:\MetaStock Data\BM Data\.NASD32 • BM NYSE INDICATORS . When volume decreases from the previous day (or week). Mov(ADI-DCI.NASDD". A sell signal is generated when the market index's price falls below its moving average and a buy signal is generated when the market index's price rises above its moving average.C).E) BM NYSE McClellan Summation The McClellan Summation Index is a cumulative total of the McClellan Oscillator values.

NNL:=Security("C:\MetaStock Data\BM Data\X.NASDL".New Lows Ratio The high/low ratio is another useful method to visualize the relationship of stocks that are making new highs/lows.$)<0.1)/1000).C). (Many new stocks are making new highs because it's easy to make a new high when prices have been depressed BM NYSE INDICATORS • 33 .New Lows Ratio Formula NNH:=Security("C:\MetaStock Data\BM Data\X. Cum(NNH-NNL) BM NYSE New Highs .C). Cum(If(ROC(TVO. NNH/NNL BM NYSE New Highs .C).V).New Lows Cumulative The New Highs-Lows Cumulative indicator is a cumulative total of the number of new highs and new lows. The indicator generally reaches its extreme lows slightly before a major market bottom.NASDH".C).$)/(Ref(MKT.V". BM NYSE New Highs .NASDL".1. High readings indicate that a large number of stocks are making new highs (compared to the number of stocks making new lows).1. Readings less than one indicate that the number of stocks making new highs is less than the number of stocks making lows. NNL:=Security("C:\MetaStock Data\BM Data\X.NASDH". the indicator jumps up rapidly. As the market then turns up from the major bottom.New Lows Cumulative Formula NNH:=Security("C:\MetaStock Data\BM Data\X.0)) BM NYSE New Highs .New Lows This indicator displays the daily difference between the number of new highs and the number of new lows. BM NYSE New Highs . The interpretation of this indicator is similar to the advance/decline line in that divergences can often be seen where the new highs-lows cumulative fails to confirm the market index's new high. ROC(MKT.

BM NYSE New Highs Formula Security("C:\MetaStock Data\BM Data\X.C) BM NYSE New Lows This indicator will show number of securities that hit a new low on the NYSE.C)Security("C:\MetaStock Data\BM Data\X. Cum(If(ROC(MKT. If(ROC(MKT. Readings above 0. and subtracting the day's volume when the market closes down.90 are generally considered bearish and readings 34 • BM NYSE INDICATORS .0))) BM NYSE Open-10 Arms Index (TRIN) The interpretation of Open-10 TRIN (also called the Open Trading Index) is similar to the interpretation of the "normal" TRIN.$)>0. It is calculated by adding the volume for the day to a cumulative total when the market closes up.) As the cycle matures.for a long time. a divergence often occurs as fewer and fewer stocks are making new highs (the New Highs-Lows falls). TVO.New Lows Formula Security("C:\MetaStock Data\BM Data\X. TVO:=Security("C:\MetaStock Data\BM Data\X. BM NYSE New Highs .C) BM NYSE New Highs This indicator will show number of securities that hit a new high on the NYSE.V).C) BM NYSE On Balance Volume On Balance Volume (OBV) relates volume to price change.C).NASD-H".NASD-H".NASD-L". BM NYSE On Balance Volume Formula MKT:=Security("C:\MetaStock Data\BM Data\.$)<0.1.Neg(TVO).1. yet the market indices continue to reach new highs.NASDV". BM NYSE New Lows Formula Security("C:\MetaStock Data\BM Data\X.NASD-L".IXIC".

TVO:=Security("C:\MetaStock Data\BM Data\X.10)/Sum(DSV.V). DCI:=Security("C:\MetaStock Data\BM Data\X.$)>0. the PVI is adjusted by the percentage that the market index's price changed. (Sum(ADI. Mov(ADI-DCI.$)/(Ref(MKT. USV:=Security("C:\MetaStock A".NASDData\BM Data\X.below 0.C).E) BM NYSE Positive Volume Index The Positive Volume Index (PVI) relates an increase in volume to the change in the market index's price.NASD- BM NYSE Overbought/Oversold The OB/OS indicator is designed to show when the stock market is overbought (and a correction is due) and when it is oversold (and a rally is due).10)/Sum(DCI. BM NYSE Overbought/Oversold Formula ADI:=Security("C:\MetaStock Data\BM Data\X.C).C).NASDV".1.NASDD".0)) BM NYSE INDICATORS • 35 . ROC(MKT.10))/ (Sum(USV.C).10.NASDA".NASDData\BM Data\X.IXIC". DSV:=Security("C:\MetaStock D". BM NYSE Open-10 Arms Index ( TRIN) Formula ADI:=Security("C:\MetaStock A".90 are considered bullish.NASDData\BM Data\X.10)) Data\BM Data\X. DCI:=Security("C:\MetaStock D". Cum(If(ROC(TVO.V). When volume increases from the previous day (or week).V).C).1)/1000). BM NYSE Positive Volume Index Formula MKT:=Security("C:\MetaStock Data\BM Data\.1. Readings above +200 are generally considered bearish and readings below -200 are generally considered bullish.

ROC(C. The oscillator is a 21-day (9%) exponential moving average of the Advance/Decline Ratio. The RSI is a price-following oscillator that ranges between 0 and 100.IXIC". BM NYSE Relative Strength Index Formula x:=Input("number of periods:".200. A more appropriate name might be Internal Strength Index. he recommended using a 14-day RSI. the 9-day and 25-day RSI’s have also gained popularity.2.BM NYSE Rate of Change (Percent) This indicator will plot the Rate of Change as a percent on a security within the NYSE. but the RSI is failing to surpass its previous high.$)) BM NYSE Relative Strength Index The name Relative Strength Index is slightly misleading as the RSI does not compare the relative strength of two market indices.RSI(x)) BM NYSE STIX STIX is a short-term trading oscillator.%)) BM NYSE Rate of Change (Points) This indicator will plot the Rate of Change as a point on a security within the NYSE.x.12). it is said to have completed a failure swing. The failure swing would be considered a confirmation of an impending reversal.2. This divergence would be an indication of an impending reversal.x.IXIC".14).ROC(C. When the RSI then turns down and falls below its most recent trough. Security("C:\MetaStock Data\BM Data\. BM NYSE Rate of Change (Percent) Formula x:=Input("number of periods:". A popular method by which to analyze the RSI is to look for a divergence wherein the market index is making new a high. BM NYSE Rate of Change (Points) Formula x:=Input("number of periods:".200. Security("C:\MetaStock Data\BM Data\.2. but rather the internal strength of a single index.200. Security("C:\MetaStock Data\BM Data\.IXIC". Since that time.12). When Wilder introduced the RSI. 36 • BM NYSE INDICATORS .

NASDD". the short-term Trading Index.2.IXIC". Stochastic Oscillators always range between 0% and 100%.y)) BM NYSE Total Volume This indicator will plot the total volume of the Nasdaq. Security("C:\MetaStock Data\BM Data\.V) BM NYSE TRIN TRIN.C).200.Stoch(x. In effect.NASD-V". A reading of 100% shows that the index's close today was the highest price that the index has closed at during the last x-days. it is popular to also display a short-term moving average of the oscillator.5).NASDA". The TRIN index is a short-term trading tool.BM NYSE STIX Formula ADI:=Security("C:\MetaStock Data\BM Data\X. A reading of 0% shows that the market index's close today was the lowest price that the index has closed at during the last x-days. The most popular combination is to select a 5-day %K with 3-day %K slowing. It is calculated by dividing the advance/decline ratio by the up/down volume ratio.C). depending on the number of days used when calculating the oscillator. TRIN shows if volume is flowing into advancing or declining stocks.E) BM NYSE Stochastic Oscillator The Stochastic Oscillator compares where a market index's price closed relative to its trading range over the last x-days Stochastic Oscillators can be used as both short and intermediate-term trading oscillators. Mov((ADI/(ADI+DCI))*100.200. BM NYSE Total Volume Formula Security("C:\MetaStock Data\BM Data\X.21. y:=Input("number of periods for %k slowing:". it shows how BM NYSE INDICATORS • 37 . When displaying a very short-term Stochastic Oscillator.1. shows the relationship between advancing/declining issues and advancing/declining (up/down) volume. DCI:=Security("C:\MetaStock Data\BM Data\X.3). BM NYSE Stochastic Oscillator Formula x:=Input("number of periods for %k:".

V). BM NYSE Upside/Downside Ratio Formula Security("C:\MetaStock Data\BM Data\X. 1987 crash reached -602). Likewise a reading of -40 would indicate that down-volume exceeded up-volume by 40 million shares.NASDData\BM Data\X. A reading of +40 million indicates that upvolume exceeded down-volume by 40 million shares. The indicator is useful to compare today's volume action with previous days. (ADI/DCI)/(USV/DSV) Data\BM Data\X. It is calculated by dividing the daily up-volume by the daily down-volume.V)/ Security("C:\MetaStock Data\BM Data\X.much volume is associated with each issue.V).NASD-U".NASDData\BM Data\X.NASD-A". USV:=Security("C:\MetaStock A". BM NYSE Unchanged Volume Formula Security("C:\MetaStock Data\BM Data\X.V) BM NYSE Upside/Downside Ratio The Upside/Downside Ratio. BM NYSE TRIN Formula ADI:=Security("C:\MetaStock A".NASD-D".C).0.V) BM NYSE Upside/Downside Volume The Upside-Downside volume indicator shows the net flow of volume into or out-of the market.NASD- BM NYSE Unchanged Volume This indicator will show all securities with unchanged volume on the Nasdaq. DSV:=Security("C:\MetaStock D". Very active days exceed ±150 million shares (the October.0 and bearish when it is above 1. DCI:=Security("C:\MetaStock D". 38 • BM NYSE INDICATORS . normal readings are in the area of ±50 million. the index will fall. as its name implies. If more volume is associated with advancing stocks than declining stocks.C). shows the relationship between up-volume and down-volume. Currently.NASDData\BM Data\X. TRIN is considered bullish when it is below 1.

NASD-A".BM NYSE Upside/Downside Volume Formula Security("C:\MetaStock Data\BM Data\X.NASD-D".V) • 39 .V)Security("C:\MetaStock Data\BM Data\X.

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