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

All Rights Reserved Copyright 2004 Printed in the U.S.A. Equis International, Inc. 90 South 400 West Suite 620 Salt Lake City, UT 84101

Equis and MetaStock are registered trademarks of Equis International. Microsoft Windows, Microsoft Windows 95 and 98, and Microsoft Explorer are trademarks of Microsoft Corporation. All other product names or services mentioned are trademarks or registered trademarks of their respective owners. This product is not a recommendation to buy or sell, but rather a guideline to interpreting the specified analysis methods. This information should only be used by investors who are aware of the risk inherent in securities trading. Equis International accept s no liability whatsoever for any loss arising from any use of this product or its contents.

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

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

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

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

the rates-of-change of these four interest rates. These indicators quantify the movement (momentum) of the market itself and have a very strong correlation with changes in the stock market. the value of their stocks). Gold and Silver. up/down volume. the Federal Funds Rate. 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. Monetary indicators display monetary/interest rate conditions which affect the stock market. Other monetary indicators include the Japanese Yen. 13 week T-Bills. The two groups of indicators: momentum and monetary. The monetary indicators include four interest rates (the Prime Rate. and 26 week T-Bills).Broad Market Indicators Broad Market Indicators are divided into two broad groups inside MetaStock 9. Swiss Franc. or new highs/lows). Broad Market Indicators • 1 . also referred to as tape indicators. and monetary. 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.0: market momentum. Market momentum indicators. and composite monetary models of these rates-of-change. combine together to give investors an overall view of the major conditions affecting the stock market.

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

%)))+ ((p2/100)*Security("C:\MetaStock Data\BM Data\. This is because daily CMI’s use daily rates-of-change.O.100.0.ROC(C. The CMIs are designed 4 • BM Monetary Indicators .25).ROC(C.200.0.p5. Rate-Of-Change % of Prime Rate R.ROC(C. Here are the contents within the Short Term Indicator: CONTENTS (SHORT-TERM MONETARY INDICATOR): Fed Funds. in indicator 13 wk T-Bills.p5.30).%)))+ ((p4/100)*Security("C:\MetaStock Data\BM Data\US6MT=RR".0. p3:=Input("13 wk T'Bills ROC %".40). CMI:=((p1/100)*Security("C:\MetaStock Data\BM Data\USPRIME=".E) BM Monetary Composite Index Medium Term BM Monetary Composite Index Medium Term is designed to track monetary (interest rate) change and momentum.O.15).p6.100.p5.0.100.1.Note that the value of the monetary indicators will vary depending on if daily data or weekly data are displayed.%))).100.13).ROC(C.200. p5:=Input("periods in Rate of Change". 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 %".C.10). p4:=Input("26 wk T'Bills ROC %".%)))+ ((p3/100)*Security("C:\MetaStock Data\BM Data\. Rate-Of-Change % of Fed Funds R.FFY". Rate-Of-Change % of 13 wk T-Bills in indicator 26 wk T-Bills.1. p6:=Input("Exponential Moving Average periods". p2:=Input("Prime Rate ROC %".IRX". while weekly CMI’s use weekly rates-of-change.C in indicator Prime Rate. Mov(CMI.p5.

This is because daily CMIs use daily rates-of-change. while weekly CMIs use weekly rates-of-change. p3:=Input("13 wk T'Bills ROC %".p5.%)))+ ((p3/100)*Security("C:\MetaStock Data\BM Data\. Mov(CMI.ROC(C.0.100.ROC(C. Rate-Of-Change % of Fed Funds R.to display changes in interest rates. CMI:=((p1/100)*Security("C:\MetaStock Data\BM Data\USPRIME=". The higher the CMI rises above zero.p5.200. p6:=Input("Exponential Moving Average periods".C in indicator Prime Rate. p4:=Input("26 wk T'Bills ROC %".ROC(C. As long as rates continue to fall.p5.IRX".25). When interest rates are falling.C.O.FFY". 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 %". the faster rates are rising.%)))+ ((p4/100)*Security("C:\MetaStock Data\BM Data\US6MT=RR". readings above zero indicate that interest rates are rising.0. Conversely.E) BM Monetary Indicators • 5 . the faster rates are falling.p5.0.100.200.25). p2:=Input("Prime Rate ROC %". Rate-Of-Change % of 13 wk T-Bills in indicator 26 wk T-Bills.O. p5:=Input("periods in Rate of Change".%)))+ ((p2/100)*Security("C:\MetaStock Data\BM Data\.100. in indicator 13 wk T-Bills.25).1. the CMI will remain below zero.25).p6. Here are the contents of the Monetary Composite Index Medium Term indicator: Fed Funds.25).ROC(C. Note that the value of the monetary indicators will vary depending on if daily data or weekly data are displayed. The further the CMI goes below zero. the CMI will drop below zero.13). Rate-Of-Change % of Prime Rate R.1.%))).100. They provide a visual tool by which you can see the rate-of-change in a composite of interest rates.0.

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

1.$).2=Prime".C). dollar.C) BM Monetary Prime Rate The Prime Rate is the interest rate U.x.ROC(irpr.C).C)Security("C:\MetaStock Data\BM Data\.$)) BM Monetary Japanese Yen These indicators display the exchange rates of the Japanese Yen to the U.S. Spread = (26 week T-bills Rate) . BM Monetary T-bill Yield Spread Formula Security("C:\MetaStock Data\BM Data\US6MT=RR". The spread between 13 week and 26 week T-Bills has averaged about 0.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. BM Monetary Prime Rate Formula Security("C:\MetaStock Data\BM Data\USPRIME=".ROC(irff.21). banks charge their best corporate clients. When the spread narrows (is lower).1000. BM Monetary Japanese Yen Formula Security(“C:\MetaStock Data\BM Data\JPY=”. x:=Input("time periods".(13 week T-bills Rate) When the Spread between T-Bills rises.1.IRX". irpr:=Security("C:\MetaStock Data\BM Data\USPRIME=". This is generally bullish. This is generally bearish.FFY". it indicates that 13 week T-Bill rates are falling faster (or rising slower) than 26 week T-Bill rates.C) BM Monetary Indicators • 7 . irff:=Security("C:\MetaStock Data\BM Data\.2. An increase in the Prime Rate is considered bearish for the stock market. it indicates that 13 week T-Bill rates are rising faster (or falling slower) than 26 week T-Bill rates.S.13% over the last several years. If(Int(ir)=1.1).

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C)Security("C:\MetaStock Data\BM Data\X. with low market activity. BM NASDAQ Absolute Breadth Index Formula Abs(Security("C:\MetaStock Data\BM Data\X.BM NASDAQ Indicators BM NASDAQ Absolute Breadth Index The ABI shows market activity. When more stocks advance than decline.000 stocks declined and 300 advanced. Classic interpretation of the ABI is that market tops are generally active.C) ) BM NASDAQ Advance/Decline Line The A/D Line is best used to measure overall market strength and market breadth. For example: If 1000 stocks advanced and 300 declined. the ABI would be +700. It disregards market direction and shows only how much activity is taking place.NASD-D". Historically." High readings indicate considerable market activity (and change) while low readings indicate lack of change. the indicator moves up and vice versa. The ABI can be thought of as an "activity index.NASDA". the ABI would still be +700. the DJIA has BM NASDAQ Indicators • 9 . 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. market bottoms are generally dull. similarly. 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. if 1. 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. when a divergence develops between the DJIA and the A/D Line. and how long the current trend has prevailed.

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

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

" Once the CTI forms a trend.Medium Term The CTI shows market strength and direction. it is usually broken for good and a new trend is established. Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero. When the CTI is in a falling trend. BM NASDAQ Composite Tape Index . it is not as subject to false readings and whipsaws as a single indicator.0.0.100. Note. we want to be short. or any time the indicator falls below -100. Buy signals are given when the indicator falls below -100 and then rises above -100.Medium Term Formula p1:=Input("Advancing and Declining Issues %". or any time the indicator rises above +100.30).V) BM NASDAQ Composite Tape Index . but we would rather follow behind by a few days than "fight the tape. Thus. the values will be different than if plotted using weekly data. when the CTI is plotted using daily data.C. The indicator can be used to anticipate market moves. although the interpretation of the weekly CTI would be very similar. Likewise. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values. The following analysis refers specifically to daily data and short-to-medium term trading.25).NASD-V".BM NASDAQ Changed Volume Formula Security("C:\MetaStock Data\BM Data\X. we assume that the NYSE index has been selected as the market index. it tends to be a trend-following indicator. the DJIA or the S&P 500). Because the CTI displays market strength (momentum). 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. p2:=Input("New Highs and New Lows %".V)Security("C:\MetaStock Data\BM Data\X.O. And once the trend is broken. we want to be long. Because the CTI is a composite of several different momentum indicators.NASD-U". In the following discussion. sell signals are generated when the indicator rises above +100 and then falls below +100.. Also note that the CTI uses the market index values to calculate the R.g. p3:=Input("Up Volume and Down Volume 12 • BM NASDAQ Indicators . it tends to stay in it for some time. the CTI will be different depending on which market index is plotted (e. The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed.100. When the CTI is in a rising trend (indicating market strength).

Note.. Data\BM Data\X. we want to be short.NASDData\BM CTI:=(((ADI/(ADI+DCI))-0. the DJIA or the S&P 500). p5:=Input("Rate of Change %".Short Term The CTI shows market strength and direction.p4. When the CTI is in a falling trend. MKT:=Security("C:\MetaStock Data\. but we would rather follow behind by a few days than "fight the tape.E) BM NASDAQ Composite Tape Index .C). the values will be different than if plotted using weekly data.NASDData\BM Data\X. the CTI will be different depending on which market index is plotted (e. NNL:=Security("C:\MetaStock L".V). USV:=Security("C:\MetaStock Data\BM Data\X. NNH:=Security("C:\MetaStock H". that when the CTI is plotted using daily data.C).5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0.g. p4:=Input("periods in Rate of Change".1.C.12).25).0. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values. it tends to stay in it for some time.V).20). we want to be long.1.NASDData\BM Data\X. we assume that the NYSE index has been selected as the market index. Because the CTI displays market strength (momentum). Because the CTI is a composite of several different momentum indicators. In the following discussion.100. DSV:=Security("C:\MetaStock D". When the CTI is in a rising trend (indicating market strength).IXIC".O.200.%".200. The following analysis refers specifically to daily data and short-to-medium term trading. although the interpretation of the weekly CTI would be very similar.0.12). it is not as subject to false readings and whipsaws BM NASDAQ Indicators • 13 .NASDA". Also note that the CTI uses the market index values to calculate the R.100. Mov(CTI. The indicator can be used to anticipate market moves.C).C)." Once the CTI forms a trend.5)*100)*(p3/100) + ROC(MKT. it tends to be a trend-following indicator.%)*(p5/100).NASDA". ADI:=Security("C:\MetaStock Data\BM Data\. p6:=Input("Exponential Moving Average periods". it is usually broken for good and a new trend is established.5)*100)*(p2/100) + (((USV/(USV+DSV))-0. And once the trend is broken.p6. Thus.

NNL:=Security("C:\MetaStock Data\BM Data\X.1. MKT:=Security("C:\MetaStock Data\BM Data\.NASDA".200.C). Mov(CTI. 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. or any time the indicator falls below -100.C).100.1.40). The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed. p4:=Input("periods in Rate of Change".NASDD".10).V).100.Short Term Formula p1:=Input("Advancing and Declining Issues %".E) BM NASDAQ Cumulative Volume Index The Cumulative Volume Index (CVI) is a cumulative total of the difference between up-volume and down-volume. BM NASDAQ Composite Tape Index .0.NASDA".0. It is calculated by 14 • BM NASDAQ Indicators .p6.10).IXIC".p4.NASDH".%)*(p5/100). sell signals are generated when the indicator rises above +100 and then falls below +100. DSV:=Security("C:\MetaStock Data\BM Data\X.5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0. Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero.5)*100)*(p3/100) + ROC(MKT.5)*100)*(p2/100) + (((USV/(USV+DSV))-0.NASDL". Likewise. CTI:=(((ADI/(ADI+DCI))-0. ADI:=Security("C:\MetaStock Data\BM Data\X.C). DCI:=Security("C:\MetaStock Data\BM Data\X.V). p2:=Input("New Highs and New Lows %". or any time the indicator rises above +100.100. p3:=Input("Up Volume and Down Volume %".200.25).C).25).NASDD".12). p5:=Input("Rate of Change %".as a single indicator.0.100.0. USV:=Security("C:\MetaStock Data\BM Data\X. NNH:=Security("C:\MetaStock Data\BM Data\X. p6:=Input("Exponential Moving Average periods".C).

For example: If the value of the CVI was 400 million yesterday. 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 . and rightly so. DSV:=Security("C:\MetaStock Data\BM Data\X. the CVI today would be 384 million. its average also moves up or down. security.NASD-D". BM NASDAQ Cumulative Volume Index Formula USV:=Security("C:\MetaStock Data\BM Data\X. The term moving implies.NASDA".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. Cum(USV-DSV) BM NASDAQ Declining Issues This indicator will determine how many declining issues there are on the Nasdaq. A moving average is a method of calculating the average value of a market index.adding the volume of advancing stocks and subtracting the volume of declining stocks from a running total. BM NASDAQ Declining Issues Formula Security("C:\MetaStock Data\BM Data\X.NASDD". that the average changes or moves. and today there were 24 million shares of up-volume and 40 million shares of down-volume. BM NASDAQ Declining Volume Formula Security("C:\MetaStock Data\BM Data\X. a mathematical analysis of the market index's average value over a predetermined time period is made.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.V). over a period of time. As the index changes over time. When calculating a moving average. or indicator.C) BM NASDAQ Declining Volume This indicator will determine the declining volume on the Nasdaq.NASD-D".

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

yet the market indices continue to reach new highs.NASDL".C). Readings less than one indicate that the number of stocks making new highs is less than the number of stocks making lows. (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. BM NASDAQ New Highs .New Lows Ratio Formula NNH:=Security("C:\MetaStock Data\BM Data\X.BM NASDAQ New Highs . NNL:=Security("C:\MetaStock Data\BM Data\X. BM NASDAQ Indicators • 17 . NNH/NNL BM NASDAQ New Highs .NASDH". 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.C).C).NASDH". the indicator moves up rapidly.New Lows Ratio The high/low ratio is another useful method to visualize the relationship of stocks that are making new highs/lows. BM NASDAQ New Highs . The indicator generally reaches its extreme lows slightly before a major market bottom. a divergence often occurs as fewer and fewer stocks are making new highs (the New Highs-Lows falls).New Lows This indicator displays the daily difference between the number of new highs and the number of new lows.C). Cum(NNH-NNL) BM NASDAQ New Highs .New Lows Cumulative The New Highs-Lows Cumulative indicator is a cumulative total of the number of new highs and new lows. 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 Formula NNH:=Security("C:\MetaStock Data\BM Data\X.) As the cycle matures. NNL:=Security("C:\MetaStock Data\BM Data\X.NASDL". As a market turns up from the major bottom.

If(ROC(MKT. and subtracting the day's volume when the market closes down. BM NASDAQ New Highs Formula Security("C:\MetaStock Data\BM Data\X.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.NASD-L".Neg(TVO).90 are generally considered bearish and readings below 0.90 are considered bullish. Readings above 0. TVO.BM NASDAQ New Highs .NASD-L".1. BM NASDAQ New Lows Formula Security("C:\MetaStock Data\BM Data\X.$)>0.C).1.NASD18 • BM NASDAQ Indicators . TVO:=Security("C:\MetaStock Data\BM Data\X.V). BM NASDAQ On Balance Volume Formula MKT:=Security("C:\MetaStock Data\BM Data\.NASD-H".C) BM NASDAQ On Balance Volume On Balance Volume (OBV) relates volume to price change.New Lows Formula Security("C:\MetaStock Data\BM Data\X.C) BM NASDAQ New Lows This indicator will show number of securities that hit a new low on the Nasdaq.$)<0. It is calculated by adding the volume for the day to a cumulative total when the market closes up.IXIC".C) BM NASDAQ New Highs This indicator will show number of securities that hit a new high on the Nasdaq. BM NASDAQ Open-10 TRIN Formula ADI:=Security("C:\MetaStock Data\BM Data\X.NASDV". Cum(If(ROC(MKT.C)Security("C:\MetaStock Data\BM Data\X.NASD-H".

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

When Wilder introduced the RSI.2.12). Since that time. The RSI is a price-following oscillator that ranges between 0 and 100.IXIC". BM NASDAQ Rate of Change (Percent) Formula x:=Input("number of periods:".200. but rather the internal strength of a single index. it is said to have completed a failure swing.2. This divergence would be an indication of an impending reversal. When the RSI then turns down and falls below its most recent trough. 20 • BM NASDAQ Indicators .200. Security("C:\MetaStock Data\BM Data\. A popular method by which to analyze the RSI is to look for a divergence wherein the market index is making new a high.200. The failure swing would be considered a confirmation of an impending reversal.12).within the Nasdaq.x. the 9-day and 25-day RSI’s have also gained popularity. but the RSI is failing to surpass its previous high.ROC(C.IXIC".14).x. Security("C:\MetaStock Data\BM Data\. Security("C:\MetaStock Data\BM Data\.IXIC". he recommended using a 14-day RSI.$)) 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.%)) BM NASDAQ Rate of Change (Points) This indicator will plot the Rate of Change as a point on a security within the Nasdaq.ROC(C. The oscillator is a 21-day (9%) exponential moving average of the Advance/Decline Ratio. BM NASDAQ Relative Strength Index Formula x:=Input("number of periods:".2.RSI(x)) BM NASDAQ STIX STIX is a short-term trading oscillator. BM NASDAQ Rate of Change (Points) Formula x:=Input("number of periods:". A more appropriate name might be Internal Strength Index.

BM NASDAQ Total Volume Formula Security("C:\MetaStock Data\BM Data\X.Stoch(x. When displaying a very short-term Stochastic Oscillator. shows the relationship between advancing/declining issues and advancing/declining (up/down) volume.NASDA".IXIC".1. Security("C:\MetaStock Data\BM Data\.V) BM NASDAQ Arms Index (TRIN) TRIN.3). depending on the number of days used when calculating the oscillator. Stochastic Oscillators always range between 0% and 100%.200. TRIN shows if volume is flowing into advancing or declining stocks.200.2. 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.y)) BM NASDAQ Total Volume This indicator will plot the total volume of the Nasdaq. Mov((ADI/(ADI+DCI))*100.BM NASDAQ STIX Formula ADI:=Security("C:\MetaStock Data\BM Data\X. DCI:=Security("C:\MetaStock Data\BM Data\X. The most popular combination is to select a 5-day %K with 3-day %K slowing. the short-term Trading Index.C). In effect.NASDD".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. BM NASDAQ Stochastic Oscillator Formula x:=Input("number of periods for %k:".21. It is calculated by dividing the advance/decline ratio by the up/down volume ratio. it shows how BM NASDAQ Indicators • 21 . y:=Input("number of periods for %k slowing:".NASD-V".C). it is popular to also display a short-term moving average of the oscillator. 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 TRIN index is a short-term trading tool.5).

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

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

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BM NYSE Absolute Breadth Index Formula Abs(Security("C:\MetaStock Data\BM Data\X. if 1.C)Security("C:\MetaStock Data\BM Data\X. with heavy swings in both directions. 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. similarly.NASDA". the ABI would still be +700.C) ) BM NYSE Advance/Decline Line The A/D Line is best used to measure overall market strength and market breadth. For example: If 1000 stocks advanced and 300 declined. 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. the ABI would be +700. and how long the current trend has prevailed.NASD-D". 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. if the trend is still intact. When more stocks advance than decline. Historically.BM NYSE INDICATORS BM NYSE Absolute Breadth Index The ABI shows market activity. It disregards market direction and shows only how much activity is taking place. the indicator moves up and vice versa. By studying the trend of the A/D Line we can see if the market is in a rising or falling trend. the DJIA has BM NYSE INDICATORS • 25 . market bottoms are generally dull.000 stocks declined and 300 advanced. with low market activity. Classic interpretation of the ABI is that market tops are generally active." High readings indicate considerable market activity (and change) while low readings indicate lack of change. The ABI can be thought of as an "activity index. when a divergence develops between the DJIA and the A/D Line.

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

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

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

NASDA".C). p3:=Input("Up Volume and Down Volume %".5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0." Once the CTI forms a trend. the DJIA or the S&P 500). The following analysis refers specifically to daily data and short-to-medium term trading.12).0. NNL:=Security("C:\MetaStock L". Also note that the CTI uses the market index values to calculate the R.20). p4:=Input("periods in Rate of Change". but we would rather follow behind by a few days than "fight the tape.C). we assume that the NYSE index has been selected as the market index.. The indicator can be used to anticipate market moves. although the interpretation of the weekly CTI would be very similar. Thus. we want to be long. Mov(CTI.5)*100)*(p3/100) + ROC(MKT.200.5)*100)*(p2/100) + (((USV/(USV+DSV))-0. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values. p2:=Input("New Highs and New Lows %". When the CTI is in a rising trend (indicating market strength). the values will be different than if plotted using weekly data.Short Term The CTI shows market strength and direction.NASDData\BM Data\X.O. And BM NYSE INDICATORS • 29 .0.100. the CTI will be different depending on which market index is plotted (e. MKT:=Security("C:\MetaStock Data\. Because the CTI displays market strength (momentum).NASDData\BM CTI:=(((ADI/(ADI+DCI))-0.g. DSV:=Security("C:\MetaStock D".1.p4. it tends to be a trend-following indicator. Note that when the CTI is plotted using daily data.0. When the CTI is in a falling trend. we want to be short.100.12).100.V).NASDA".NASDData\BM Data\X.1.0.100.%".25). USV:=Security("C:\MetaStock Data\BM Data\X.30).200.p6.IXIC". it tends to stay in it for some time.25). p6:=Input("Exponential Moving Average periods".%)*(p5/100). In the following discussion. ADI:=Security("C:\MetaStock Data\BM Data\.C).V). p5:=Input("Rate of Change %".E) BM NYSE Composite Tape Index .C). NNH:=Security("C:\MetaStock H".C. Data\BM Data\X.

0.once the trend is broken. p6:=Input("Exponential Moving Average periods".C). p5:=Input("Rate of Change %".p6.200.5)*100)*(p2/100) + (((USV/(USV+DSV))-0. or any time the indicator rises above +100. USV:=Security("C:\MetaStock Data\BM Data\X.V).NASDH". Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero.Short Term Formula p1:=Input("Advancing and Declining Issues %".25).V). it is not as subject to false readings and whipsaws as a single indicator.p4. DSV:=Security("C:\MetaStock Data\BM Data\X.12).100.0. p4:=Input("periods in Rate of Change".IXIC".%)*(p5/100).100.100. ADI:=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. Because the CTI is a composite of several different momentum indicators. p2:=Input("New Highs and New Lows %".200. Buy signals are given when the indicator falls below -100 and then rises above -100. DCI:=Security("C:\MetaStock Data\BM Data\X.C).100.5)*100)*(p3/100) + ROC(MKT. The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed.NASDD".C).NASDA". Likewise.0.0.1. BM NYSE Composite Tape Index . NNL:=Security("C:\MetaStock Data\BM Data\X. p3:=Input("Up Volume and Down Volume %". it is usually broken for good and a new trend is established.NASDL".C).40).25). Mov(CTI.10).E) 30 • BM NYSE INDICATORS .NASDA".1. sell signals are generated when the indicator rises above +100 and then falls below +100.C).NASDD". or any time the indicator falls below -100. NNH:=Security("C:\MetaStock Data\BM Data\X.5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0. CTI:=(((ADI/(ADI+DCI))-0.10). MKT:=Security("C:\MetaStock Data\BM Data\.

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

E)-Mov(ADI-DCI.IXIC". BM NYSE MACD Formula Security("C:\MetaStock Data\BM Data\.19.NASDA". DCI:=Security("C:\MetaStock Data\BM Data\X. BM NYSE McClellan Summation Formula ADI:=Security("C:\MetaStock Data\BM Data\X.C).39. BM NYSE McClellan Oscillator Formula ADI:=Security("C:\MetaStock Data\BM Data\X.NASDD". DCI:=Security("C:\MetaStock Data\BM Data\X.NASDA".IXIC".E) BM NYSE McClellan Summation The McClellan Summation Index is a cumulative total of the McClellan Oscillator values.NASD32 • BM NYSE INDICATORS .the relationship of the moving average of a market index's closing price to the market index's closing price itself.C). TVO:=Security("C:\MetaStock Data\BM Data\X.C). the NVI is adjusted by the percentage that the market index's price changed. When volume decreases from the previous day (or week). BM NYSE Negative Volume Index Formula MKT:=Security("C:\MetaStock Data\BM Data\.C).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. Mov(ADI-DCI.C).NASDD". BM NYSE Negative Volume Index The Negative Volume Index (NVI) relates a drop in volume to the change in the market index's price. 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.

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

BM NYSE New Highs . TVO:=Security("C:\MetaStock Data\BM Data\X.for a long time. TVO.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.C) BM NYSE New Highs This indicator will show number of securities that hit a new high on the NYSE.NASD-H".1.NASD-L". BM NYSE New Lows Formula Security("C:\MetaStock Data\BM Data\X.C).1.90 are generally considered bearish and readings 34 • BM NYSE INDICATORS .V). Cum(If(ROC(MKT. BM NYSE On Balance Volume Formula MKT:=Security("C:\MetaStock Data\BM Data\.C)Security("C:\MetaStock Data\BM Data\X.IXIC". Readings above 0.$)>0.C) BM NYSE On Balance Volume On Balance Volume (OBV) relates volume to price change.Neg(TVO). If(ROC(MKT.) As the cycle matures. BM NYSE New Highs Formula Security("C:\MetaStock Data\BM Data\X. It is calculated by adding the volume for the day to a cumulative total when the market closes up.New Lows Formula Security("C:\MetaStock Data\BM Data\X. and subtracting the day's volume when the market closes down.NASD-L". a divergence often occurs as fewer and fewer stocks are making new highs (the New Highs-Lows falls).C) BM NYSE New Lows This indicator will show number of securities that hit a new low on the NYSE.NASD-H".$)<0.NASDV". yet the market indices continue to reach new highs.

IXIC".V).C). DSV:=Security("C:\MetaStock D".NASDD". BM NYSE Positive Volume Index Formula MKT:=Security("C:\MetaStock Data\BM Data\.C).below 0. DCI:=Security("C:\MetaStock Data\BM Data\X.$)/(Ref(MKT.V). Cum(If(ROC(TVO. Readings above +200 are generally considered bearish and readings below -200 are generally considered bullish. the PVI is adjusted by the percentage that the market index's price changed.NASDData\BM Data\X.10)/Sum(DCI.NASD- BM NYSE Overbought/Oversold The OB/OS indicator is designed to show when the stock market is overbought (and a correction is due) and when it is oversold (and a rally is due). Mov(ADI-DCI. When volume increases from the previous day (or week). (Sum(ADI. ROC(MKT. TVO:=Security("C:\MetaStock Data\BM Data\X.10.NASDData\BM Data\X.0)) BM NYSE INDICATORS • 35 . DCI:=Security("C:\MetaStock D".10))/ (Sum(USV.NASDV".$)>0.C).C).1.V). BM NYSE Overbought/Oversold Formula ADI:=Security("C:\MetaStock Data\BM Data\X. USV:=Security("C:\MetaStock A". BM NYSE Open-10 Arms Index ( TRIN) Formula ADI:=Security("C:\MetaStock A".NASDA".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.C).10)/Sum(DSV.10)) Data\BM Data\X.1)/1000).NASDData\BM Data\X.1.90 are considered bullish.

2. it is said to have completed a failure swing.ROC(C. Security("C:\MetaStock Data\BM Data\. When the RSI then turns down and falls below its most recent trough. BM NYSE Rate of Change (Points) Formula x:=Input("number of periods:". When Wilder introduced the RSI.IXIC". BM NYSE Relative Strength Index Formula x:=Input("number of periods:".14).2.BM NYSE Rate of Change (Percent) This indicator will plot the Rate of Change as a percent on a security within the NYSE. A more appropriate name might be Internal Strength Index. Security("C:\MetaStock Data\BM Data\. the 9-day and 25-day RSI’s have also gained popularity. A popular method by which to analyze the RSI is to look for a divergence wherein the market index is making new a high.x. This divergence would be an indication of an impending reversal.200.x. 36 • BM NYSE INDICATORS .2.12). The failure swing would be considered a confirmation of an impending reversal. BM NYSE Rate of Change (Percent) Formula x:=Input("number of periods:".IXIC".200. but the RSI is failing to surpass its previous high. Since that time.IXIC".$)) 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.200. The RSI is a price-following oscillator that ranges between 0 and 100. Security("C:\MetaStock Data\BM Data\. but rather the internal strength of a single index.%)) BM NYSE Rate of Change (Points) This indicator will plot the Rate of Change as a point on a security within the NYSE.RSI(x)) BM NYSE STIX STIX is a short-term trading oscillator.ROC(C.12). he recommended using a 14-day RSI. The oscillator is a 21-day (9%) exponential moving average of the Advance/Decline Ratio.

y)) BM NYSE Total Volume This indicator will plot the total volume of the Nasdaq.3). 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 calculated by dividing the advance/decline ratio by the up/down volume ratio.Stoch(x.NASD-V".1. BM NYSE Stochastic Oscillator Formula x:=Input("number of periods for %k:". it shows how BM NYSE INDICATORS • 37 . depending on the number of days used when calculating the oscillator.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. The most popular combination is to select a 5-day %K with 3-day %K slowing. When displaying a very short-term Stochastic Oscillator.V) BM NYSE TRIN TRIN. the short-term Trading Index. TRIN shows if volume is flowing into advancing or declining stocks. Stochastic Oscillators always range between 0% and 100%. BM NYSE Total Volume Formula Security("C:\MetaStock Data\BM Data\X.C).21. Mov((ADI/(ADI+DCI))*100.NASDA".200. In effect.200.IXIC". DCI:=Security("C:\MetaStock Data\BM Data\X.C). Security("C:\MetaStock Data\BM Data\. shows the relationship between advancing/declining issues and advancing/declining (up/down) volume. The TRIN index is a short-term trading tool.NASDD". 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.5). y:=Input("number of periods for %k slowing:". it is popular to also display a short-term moving average of the oscillator.BM NYSE STIX Formula ADI:=Security("C:\MetaStock Data\BM Data\X.2.

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

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

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