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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.

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

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

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

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

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

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

0.0.FFY".E) BM Monetary Composite Index Medium Term BM Monetary Composite Index Medium Term is designed to track monetary (interest rate) change and momentum.C in indicator Prime Rate.ROC(C.%)))+ ((p2/100)*Security("C:\MetaStock Data\BM Data\.Note that the value of the monetary indicators will vary depending on if daily data or weekly data are displayed. Mov(CMI.100. Rate-Of-Change % of 13 wk T-Bills in indicator 26 wk T-Bills.%)))+ ((p3/100)*Security("C:\MetaStock Data\BM Data\.200.13). This is because daily CMI’s use daily rates-of-change.200.p5. Here are the contents within the Short Term Indicator: CONTENTS (SHORT-TERM MONETARY INDICATOR): Fed Funds.100.C. p2:=Input("Prime Rate ROC %".25). Rate-Of-Change % of Prime Rate R.ROC(C. while weekly CMI’s use weekly rates-of-change.p5.100.0.15). p4:=Input("26 wk T'Bills ROC %". p5:=Input("periods in Rate of Change".O.%))). p3:=Input("13 wk T'Bills ROC %".100.p6.ROC(C. p6:=Input("Exponential Moving Average periods".10). The CMIs are designed 4 • BM Monetary Indicators . CMI:=((p1/100)*Security("C:\MetaStock Data\BM Data\USPRIME=".40). 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.p5.p5. in indicator 13 wk T-Bills.30).%)))+ ((p4/100)*Security("C:\MetaStock Data\BM Data\US6MT=RR". Rate-Of-Change % of Fed Funds R.ROC(C.0.IRX".1.O.

the CMI will remain below zero.100. the faster rates are rising.0.0.O.p5. p3:=Input("13 wk T'Bills ROC %". p4:=Input("26 wk T'Bills ROC %".%)))+ ((p4/100)*Security("C:\MetaStock Data\BM Data\US6MT=RR".FFY".200.p6.ROC(C.E) BM Monetary Indicators • 5 .0. p5:=Input("periods in Rate of Change".%)))+ ((p3/100)*Security("C:\MetaStock Data\BM Data\.ROC(C.100.25).1. As long as rates continue to fall.ROC(C.25). This is because daily CMIs use daily rates-of-change. The further the CMI goes below zero.to display changes in interest rates.C. Rate-Of-Change % of 13 wk T-Bills in indicator 26 wk T-Bills. Mov(CMI.1.100. The higher the CMI rises above zero.13).200.%)))+ ((p2/100)*Security("C:\MetaStock Data\BM Data\.ROC(C. while weekly CMIs use weekly rates-of-change.C in indicator Prime Rate. Rate-Of-Change % of Fed Funds R. When interest rates are falling. p6:=Input("Exponential Moving Average periods". Note that the value of the monetary indicators will vary depending on if daily data or weekly data are displayed. They provide a visual tool by which you can see the rate-of-change in a composite of interest rates. readings above zero indicate that interest rates are rising.p5.O.p5. 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 %".25). in indicator 13 wk T-Bills.25). CMI:=((p1/100)*Security("C:\MetaStock Data\BM Data\USPRIME=". the CMI will drop below zero. the faster rates are falling.%))). Conversely.100.IRX". Rate-Of-Change % of Prime Rate R.0. p2:=Input("Prime Rate ROC %".25).p5. Here are the contents of the Monetary Composite Index Medium Term indicator: Fed Funds.

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

C). it indicates that 13 week T-Bill rates are falling faster (or rising slower) than 26 week T-Bill rates.1000.C) BM Monetary Indicators • 7 .ROC(irpr. dollar.FFY".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. BM Monetary Japanese Yen Formula Security(“C:\MetaStock Data\BM Data\JPY=”. banks charge their best corporate clients. This is generally bullish.21). Spread = (26 week T-bills Rate) . it indicates that 13 week T-Bill rates are rising faster (or falling slower) than 26 week T-Bill rates. The spread between 13 week and 26 week T-Bills has averaged about 0.1).ROC(irff.C). irff:=Security("C:\MetaStock Data\BM Data\.S. irpr:=Security("C:\MetaStock Data\BM Data\USPRIME=".IRX". BM Monetary T-bill Yield Spread Formula Security("C:\MetaStock Data\BM Data\US6MT=RR". This is generally bearish. BM Monetary Prime Rate Formula Security("C:\MetaStock Data\BM Data\USPRIME=".1.x.2.1. When the spread narrows (is lower).C)Security("C:\MetaStock Data\BM Data\. x:=Input("time periods".13% over the last several years. An increase in the Prime Rate is considered bearish for the stock market.S.$).$)) BM Monetary Japanese Yen These indicators display the exchange rates of the Japanese Yen to the U. If(Int(ir)=1.x.2=Prime".(13 week T-bills Rate) When the Spread between T-Bills rises.C) BM Monetary Prime Rate The Prime Rate is the interest rate U.

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

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

BM NASDAQ Advancing Issues This indicator displays the number of advancing issues on the Nasdaq. DCI:=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).5% within a 10-day period.NASD-A".C) BM NASDAQ Advancing Volume This indicator displays the advancing volume on the Nasdaq. Both of these indicators are basically a line chart of daily Nasdaq volume. developed by Dr.NASD-A". A "Breadth Thrust" is said to have occurred when the Breadth Thrust indicator rises from below 40% to above 61. When a "Thrust" occurs.V) BM NASDAQ Breadth Thrust The Breadth Thrust indicator. It is calculated by adding up-volume.C).S) BM NASDAQ Changed Volume Changed volume refers to the volume of shares traded on the Nasdaq that either increased or decreased in price.NASDA".NASDD". Mov(ADI/(ADI+DCI). Martin Zweig. It is calculated by dividing a 10-day moving average of the number of advancing issues. It is calculated by adding upvolume to down-volume (or subtracting unchanged-volume from totalvolume). is a momentum indicator. Total volume refers to the total volume of shares traded on the Nasdaq. BM NASDAQ Indicators • 11 . and unchangedvolume together. BM NASDAQ Breadth Thrust Formula ADI:=Security("C:\MetaStock Data\BM Data\X. BM NASDAQ Advancing Volume Formula Security("C:\MetaStock Data\BM Data\X. by the number of advancing plus declining issues. BM NASDAQ Advancing Issues Formula Security("C:\MetaStock Data\BM Data\X. down-volume.10.

The following analysis refers specifically to daily data and short-to-medium term trading. we assume that the NYSE index has been selected as the market index. Because the CTI is a composite of several different momentum indicators. sell signals are generated when the indicator rises above +100 and then falls below +100.BM NASDAQ Changed Volume Formula Security("C:\MetaStock Data\BM Data\X.C. And once the trend is broken. the CTI will be different depending on which market index is plotted (e.. we want to be long. The indicator can be used to anticipate market moves. Also note that the CTI uses the market index values to calculate the R. BM NASDAQ Composite Tape Index .NASD-U". The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed. or any time the indicator rises above +100. it is not as subject to false readings and whipsaws as a single indicator. p2:=Input("New Highs and New Lows %".O.0. the DJIA or the S&P 500). 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.Medium Term The CTI shows market strength and direction.30).0.NASD-V". it tends to be a trend-following indicator. 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 rising trend (indicating market strength). although the interpretation of the weekly CTI would be very similar. In the following discussion. we want to be short.V)Security("C:\MetaStock Data\BM Data\X. Buy signals are given when the indicator falls below -100 and then rises above -100.g. Note. When the CTI is in a falling trend. it tends to stay in it for some time. it is usually broken for good and a new trend is established. Likewise." Once the CTI forms a trend.V) BM NASDAQ Composite Tape Index .100. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values. or any time the indicator falls below -100. Because the CTI displays market strength (momentum). the values will be different than if plotted using weekly data.25). but we would rather follow behind by a few days than "fight the tape.100. p3:=Input("Up Volume and Down Volume 12 • BM NASDAQ Indicators . Thus. when the CTI is plotted using daily data.Medium Term Formula p1:=Input("Advancing and Declining Issues %".

NASDA".Short Term The CTI shows market strength and direction.V).5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0. p5:=Input("Rate of Change %".12).5)*100)*(p3/100) + ROC(MKT. we want to be long.1. When the CTI is in a rising trend (indicating market strength).C). NNH:=Security("C:\MetaStock H". Data\BM Data\X. When the CTI is in a falling trend. In the following discussion. DSV:=Security("C:\MetaStock D".1. MKT:=Security("C:\MetaStock Data\. Also note that the CTI uses the market index values to calculate the R.20). The following analysis refers specifically to daily data and short-to-medium term trading.C. p6:=Input("Exponential Moving Average periods"." Once the CTI forms a trend.E) BM NASDAQ Composite Tape Index . ADI:=Security("C:\MetaStock Data\BM Data\.NASDA".C).V).%". it is usually broken for good and a new trend is established. it tends to stay in it for some time.200. Thus. the values will be different than if plotted using weekly data.O.p6. we assume that the NYSE index has been selected as the market index. it tends to be a trend-following indicator.C).g.NASDData\BM CTI:=(((ADI/(ADI+DCI))-0.IXIC".NASDData\BM Data\X.NASDData\BM Data\X. And once the trend is broken.200. The indicator can be used to anticipate market moves.0.100.C). although the interpretation of the weekly CTI would be very similar. Because the CTI displays market strength (momentum). NNL:=Security("C:\MetaStock L".p4.%)*(p5/100).5)*100)*(p2/100) + (((USV/(USV+DSV))-0. Note.100. we want to be short. p4:=Input("periods in Rate of Change"..25). Mov(CTI. that when the CTI is plotted using daily data.0. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values. the CTI will be different depending on which market index is plotted (e. but we would rather follow behind by a few days than "fight the tape.12). the DJIA or the S&P 500). it is not as subject to false readings and whipsaws BM NASDAQ Indicators • 13 . Because the CTI is a composite of several different momentum indicators. USV:=Security("C:\MetaStock Data\BM Data\X.

It is calculated by 14 • BM NASDAQ Indicators .C). Likewise. NNL:=Security("C:\MetaStock Data\BM Data\X. sell signals are generated when the indicator rises above +100 and then falls below +100.12).C). MKT:=Security("C:\MetaStock Data\BM Data\.40).as a single indicator.1.10).0.100.100.C). 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.NASDD". p2:=Input("New Highs and New Lows %". 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))-0.1.NASDH".10). Mov(CTI.100. CTI:=(((ADI/(ADI+DCI))-0.p4.0.V). DSV:=Security("C:\MetaStock Data\BM Data\X. NNH:=Security("C:\MetaStock Data\BM Data\X.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 . DCI:=Security("C:\MetaStock Data\BM Data\X.5)*100)*(p3/100) + ROC(MKT. ADI:=Security("C:\MetaStock Data\BM Data\X.200.25). p4:=Input("periods in Rate of Change".C). p3:=Input("Up Volume and Down Volume %".Short Term Formula p1:=Input("Advancing and Declining Issues %".p6.25).NASDD". USV:=Security("C:\MetaStock Data\BM Data\X. or any time the indicator rises above +100.0. p6:=Input("Exponential Moving Average periods".NASDA".5)*100)*(p2/100) + (((USV/(USV+DSV))-0. p5:=Input("Rate of Change %".100.IXIC". Buy signals are given when the indicator falls below -100 and then rises above -100. Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero.200.0.NASDA".C).V).%)*(p5/100). or any time the indicator falls below -100.NASDL".

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

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

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

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

10.NASDD". BM NASDAQ Positive Volume Index Formula MKT:=Security("C:\MetaStock Data\BM Data\. DCI:=Security("C:\MetaStock Data\BM Data\X. USV:=Security("C:\MetaStock Data\BM Data\X. the PVI is adjusted by the percentage that the market index's price changed.C).NASDA". Mov(ADI-DCI.V).NASDV".V).NASDA".C).1)/1000).NASDD".IXIC".10)/Sum(DCI.1.A". DCI:=Security("C:\MetaStock Data\BM Data\X. When volume increases from the previous day (or week). (Sum(ADI.C).10))/ (Sum(USV. Readings above +200 are generally considered bearish and readings below -200 are generally considered bullish.V). TVO:=Security("C:\MetaStock Data\BM Data\X.NASDD". ROC(MKT.$)>0.1. BM NASDAQ Overbought/Oversold Formula ADI:=Security("C:\MetaStock Data\BM Data\X. Cum(If(ROC(TVO.$)/(Ref(MKT.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).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.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 .10)/Sum(DSV.C).C). DSV:=Security("C:\MetaStock Data\BM Data\X.

ROC(C.IXIC".200.within the Nasdaq.2.200.ROC(C. The failure swing would be considered a confirmation of an impending reversal.200. The oscillator is a 21-day (9%) exponential moving average of the Advance/Decline Ratio.14).RSI(x)) BM NASDAQ STIX STIX is a short-term trading oscillator.IXIC". Security("C:\MetaStock Data\BM Data\. Security("C:\MetaStock Data\BM Data\. but rather the internal strength of a single index. the 9-day and 25-day RSI’s have also gained popularity. A more appropriate name might be Internal Strength Index. but the RSI is failing to surpass its previous high.x. When the RSI then turns down and falls below its most recent trough.2.2.%)) BM NASDAQ Rate of Change (Points) This indicator will plot the Rate of Change as a point on a security within the Nasdaq. 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 NASDAQ Rate of Change (Points) Formula x:=Input("number of periods:".IXIC". The RSI is a price-following oscillator that ranges between 0 and 100. 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. 20 • BM NASDAQ Indicators .12). Security("C:\MetaStock Data\BM Data\. BM NASDAQ Relative Strength Index Formula x:=Input("number of periods:". This divergence would be an indication of an impending reversal.12). it is said to have completed a failure swing.x. Since that time. BM NASDAQ Rate of Change (Percent) Formula x:=Input("number of periods:". When Wilder introduced the RSI.

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

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

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

.

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

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

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

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

it tends to be a trend-following indicator. In the following discussion.E) BM NYSE Composite Tape Index . Mov(CTI.O.1.NASDA".V).20). p2:=Input("New Highs and New Lows %".%)*(p5/100). NNL:=Security("C:\MetaStock L". the DJIA or the S&P 500).p4. USV:=Security("C:\MetaStock Data\BM Data\X.1. And BM NYSE INDICATORS • 29 .25).V).%". we want to be short.100.0.NASDData\BM Data\X.NASDData\BM Data\X.0. the CTI will be different depending on which market index is plotted (e. Also note that the CTI uses the market index values to calculate the R. we assume that the NYSE index has been selected as the market index. This is because the weekly data uses the weekly rates-of-change and weekly moving averages rather than daily values. although the interpretation of the weekly CTI would be very similar. p5:=Input("Rate of Change %". Note that when the CTI is plotted using daily data." Once the CTI forms a trend. we want to be long. p3:=Input("Up Volume and Down Volume %".5)*100)*(p3/100) + ROC(MKT. Data\BM Data\X.100. NNH:=Security("C:\MetaStock H".Short Term The CTI shows market strength and direction. The indicator can be used to anticipate market moves.12).200.g. When the CTI is in a rising trend (indicating market strength).IXIC".30).NASDA".p6.5)*100)*(p2/100) + (((USV/(USV+DSV))-0.C).0.100.25). but we would rather follow behind by a few days than "fight the tape. ADI:=Security("C:\MetaStock Data\BM Data\.C)..C. the values will be different than if plotted using weekly data.5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0.C).0. Because the CTI displays market strength (momentum). p6:=Input("Exponential Moving Average periods". it tends to stay in it for some time. MKT:=Security("C:\MetaStock Data\.12).100. DSV:=Security("C:\MetaStock D". Thus. p4:=Input("periods in Rate of Change". When the CTI is in a falling trend.200. The following analysis refers specifically to daily data and short-to-medium term trading.C).NASDData\BM CTI:=(((ADI/(ADI+DCI))-0.

p2:=Input("New Highs and New Lows %". or any time the indicator falls below -100.25).Short Term Formula p1:=Input("Advancing and Declining Issues %". Because the CTI is a composite of several different momentum indicators.E) 30 • BM NYSE INDICATORS .p4.100. it is not as subject to false readings and whipsaws as a single indicator.V).0.C).100.NASDA".25). NNL:=Security("C:\MetaStock Data\BM Data\X. sell signals are generated when the indicator rises above +100 and then falls below +100.0. Mov(CTI. USV:=Security("C:\MetaStock Data\BM Data\X.IXIC".200.100.5)*100)*(p3/100) + ROC(MKT.5)*100)*(p2/100) + (((USV/(USV+DSV))-0.%)*(p5/100). it is usually broken for good and a new trend is established. DCI:=Security("C:\MetaStock Data\BM Data\X. p6:=Input("Exponential Moving Average periods".1. DSV:=Security("C:\MetaStock Data\BM Data\X. p4:=Input("periods in Rate of Change". or any time the indicator rises above +100. MKT:=Security("C:\MetaStock Data\BM Data\.0.once the trend is broken.0.10).NASDA".C).NASDH".40). Buy signals are given when the indicator falls below -100 and then rises above -100. ADI:=Security("C:\MetaStock Data\BM Data\X.C). Another system that works well is to buy when the CTI rises above zero and sell when it falls below zero. Likewise.12).5)*100)*(p1/100) + (((NNH/(NNH+NNL))-0.NASDD".10).200.p6. NNH:=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.C).NASDL".1.V).C). p3:=Input("Up Volume and Down Volume %". BM NYSE Composite Tape Index .100. The basic analysis of the CTI requires determining the current trend and deciding when the trend has changed.NASDD". CTI:=(((ADI/(ADI+DCI))-0. p5:=Input("Rate of Change %".

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

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

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

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

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

2. he recommended using a 14-day RSI.IXIC". The failure swing would be considered a confirmation of an impending reversal. The oscillator is a 21-day (9%) exponential moving average of the Advance/Decline Ratio. This divergence would be an indication of an impending reversal. A more appropriate name might be Internal Strength Index. but the RSI is failing to surpass its previous high. When Wilder introduced the RSI.RSI(x)) BM NYSE STIX STIX is a short-term trading oscillator.12).$)) 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.IXIC".12).IXIC". 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.x.200.14). BM NYSE Rate of Change (Percent) Formula x:=Input("number of periods:".BM NYSE Rate of Change (Percent) This indicator will plot the Rate of Change as a percent on a security within the NYSE. BM NYSE Relative Strength Index Formula x:=Input("number of periods:". BM NYSE Rate of Change (Points) Formula x:=Input("number of periods:". When the RSI then turns down and falls below its most recent trough.200.2. Security("C:\MetaStock Data\BM Data\. it is said to have completed a failure swing.ROC(C. the 9-day and 25-day RSI’s have also gained popularity.2. Since that time. 36 • BM NYSE INDICATORS .x. Security("C:\MetaStock Data\BM Data\. The RSI is a price-following oscillator that ranges between 0 and 100. 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. Security("C:\MetaStock Data\BM Data\.ROC(C.

C). Security("C:\MetaStock Data\BM Data\. When displaying a very short-term Stochastic Oscillator. shows the relationship between advancing/declining issues and advancing/declining (up/down) volume. y:=Input("number of periods for %k slowing:".V) BM NYSE TRIN TRIN.Stoch(x.BM NYSE STIX Formula ADI:=Security("C:\MetaStock Data\BM Data\X.y)) BM NYSE Total Volume This indicator will plot the total volume of the Nasdaq.C). DCI:=Security("C:\MetaStock Data\BM Data\X.3). the short-term Trading Index.NASD-V".NASDD". TRIN shows if volume is flowing into advancing or declining stocks. BM NYSE Stochastic Oscillator Formula x:=Input("number of periods for %k:". BM NYSE Total Volume Formula Security("C:\MetaStock Data\BM Data\X.200. depending on the number of days used when calculating the oscillator.NASDA". It is calculated by dividing the advance/decline ratio by the up/down volume ratio.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. it shows how BM NYSE INDICATORS • 37 . it is popular to also display a short-term moving average of the oscillator.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. Mov((ADI/(ADI+DCI))*100.1. In effect. The most popular combination is to select a 5-day %K with 3-day %K slowing.5).IXIC". 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.200. The TRIN index is a short-term trading tool. Stochastic Oscillators always range between 0% and 100%.21.

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

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

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