Thursday, March 17, 2016

The NYSI summation index ($NYSI)

The NYSE Summation Index ($NYSI) is actually the summation of another index, the McClellan Summation Index. In short, the McClellan Summation Index takes into account market breadth and accounts for how strong or weak a trend is.

The NYSE Summation Index is a breadth indicator and is calculated from the McClellan Oscillator. McClellan Oscillator is a breadth indicator based on Net Advances (advancing issues less declining issues).  It is simple the running total of the McClellan Oscillator. $NYSI rises when $NYMO the McClellan Oscillator of the NYSE is positive and falls when it’s negative. Remember $NYMO is calculated from the net advances on the NYSE.

The Summation Index is also an oscillator, it moves above and below the zero line. When the Summation Index stays above zero and rising it’s bullish and when falling and below zero is bearish.

The McClellan Oscillator can be used for shorter-term trading and the Summation Index for medium and long-term trading.

Divergences between the Summation Index and the Index itself can warn us of a possible correction or trend reversal.

1 comment:

  1. Good explanation. We use this indicator daily. - jeff