Introduction
The index of summation MakKlellen is a popular market breadth indicator that is ultimately derived from the number of promotions and reduce market-based instruments. This indicator is obtained from the oscillator MakKlellen (see previous issue zhirnala), by tracking its daily accumulation or summation. This ensures long-term review of the concept MakKlellen. Many traders saw it as an excellent indicator of the overall "health" market and the current market trend. This indicator was developed by Sherman and Marian MakKlellen and first presented in their book "Models for profit."
Calculation
There are two methods for calculating the index of summation. The first method (originally used MakKlellen) simply maintains the current overall value of the oscillator MakKlellen (see Oscillator MakKlellen at number 29). The second method uses the following formula:
Summation Index = 1000 + (10% Trend - 5% Trend) - ((10 x 10% Trend) + (20 x 5Trend))
where:
5% Trend = 39-day EMA (Increase - decrease)
10% Trend = 19-day EMA (Increase - decrease)
The index of summation MakKlellen generally varies between 0 and 2000, although he can move outside this range during extreme or unusual market conditions. Historically, the main reason to come after the market index falls below -1000. Values above 1600 are often suggest that the main peak is near. Signal peaks and the grounds are more important, when the index also shows divergence with the price of market-based instruments. According MakKlellen, signal the beginning of a new bovine market occurs if the index of summation, first move below the -1200 and then quickly rises above 2,500.
The index of summation is simply the version oscillator MakKlellen with longer range. Taking into account that the oscillator MakKlellen used in the trade for the short and medium term objectives, the summation index provides an overview of a longer-term range of market breadth and is used to identify key market turning points.
Chart above shows the index of summation MakKlellen (corrected ratio) for the NYSE. A sudden movement of -650 at the end of September to 675, less than four months, can be interpreted as the main bullish turning point in the market.
The index ratio is calculated with corrected by another and is used for easier comparisons over long periods of time. First, the basic input data for the version with the corrected correlation is not a day increases minus reduction. A computed as follows:
1. Of the increases are offset reduction.
2,. The result is divided by the total number of increases and declines.
3. The result is multiplied by 1000. (Multiply by 1000 is simply cosmetic, and allows to work with integers instead of decimal)
The rest of the calculations for the oscillator is the same.
The second difference is that zero (0) is considered neutral for the index of summation, so that you do not start with 1000 in its calculation of the index of summation.
The index of summation MakKlellen is a popular market breadth indicator that is ultimately derived from the number of promotions and reduce market-based instruments. This indicator is obtained from the oscillator MakKlellen (see previous issue zhirnala), by tracking its daily accumulation or summation. This ensures long-term review of the concept MakKlellen. Many traders saw it as an excellent indicator of the overall "health" market and the current market trend. This indicator was developed by Sherman and Marian MakKlellen and first presented in their book "Models for profit."
Calculation
There are two methods for calculating the index of summation. The first method (originally used MakKlellen) simply maintains the current overall value of the oscillator MakKlellen (see Oscillator MakKlellen at number 29). The second method uses the following formula:
Summation Index = 1000 + (10% Trend - 5% Trend) - ((10 x 10% Trend) + (20 x 5Trend))
where:
5% Trend = 39-day EMA (Increase - decrease)
10% Trend = 19-day EMA (Increase - decrease)
The index of summation MakKlellen generally varies between 0 and 2000, although he can move outside this range during extreme or unusual market conditions. Historically, the main reason to come after the market index falls below -1000. Values above 1600 are often suggest that the main peak is near. Signal peaks and the grounds are more important, when the index also shows divergence with the price of market-based instruments. According MakKlellen, signal the beginning of a new bovine market occurs if the index of summation, first move below the -1200 and then quickly rises above 2,500.
The index of summation is simply the version oscillator MakKlellen with longer range. Taking into account that the oscillator MakKlellen used in the trade for the short and medium term objectives, the summation index provides an overview of a longer-term range of market breadth and is used to identify key market turning points.
Chart above shows the index of summation MakKlellen (corrected ratio) for the NYSE. A sudden movement of -650 at the end of September to 675, less than four months, can be interpreted as the main bullish turning point in the market.The index ratio is calculated with corrected by another and is used for easier comparisons over long periods of time. First, the basic input data for the version with the corrected correlation is not a day increases minus reduction. A computed as follows:
1. Of the increases are offset reduction.
2,. The result is divided by the total number of increases and declines.
3. The result is multiplied by 1000. (Multiply by 1000 is simply cosmetic, and allows to work with integers instead of decimal)
The rest of the calculations for the oscillator is the same.
The second difference is that zero (0) is considered neutral for the index of summation, so that you do not start with 1000 in its calculation of the index of summation.
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