(1) What is ( MSI )
( MSI ) is a breadth indicator derived the (MO),
which is a breadth indicator based on Net Advances (advancing issues less declining issues).
The Summation Index is simply a running total of the values.
To identify the market direction, I prefer to use the ( ) of MSI rather than MSI itself
because MSI is a summation so it's difficult to compare with previous market patterns. So I use applied MSI .
Reference: Stockcharts.com has a nice set of detailed explanation about MSI .
(2) How to use this script
- Add this script to your chart.
- You can choose one of two options ("MSI RSI" or "MO").
- You can also choose the market from three options ("Nasdaq", "NYSE", "Nasdaq+NYSE")
(3) "MSI RSI" or "MO"
a) "MSI RSI"
For swing trade(sevelal weeks), MSI is much better to identify the broad market direction.
I backtested last several years of S&P500 . The result was not symmetrical between MT bear/bull market.
For bull side, when MSI curls up from the bottom(e.g. 30 level), 90% of times out of them the market rallied.
For bear side, when MSI rolles over to downside from the top(e.g. 70 level), only 60% of times out of them the market declined.
So the market tends to hit negatively diverrgent high from advancing/declining issues perspective. Be careful to use MSI oscilator.
For short term trade(intraday, 2-3 days of holding), MO is better because MSI is a summation so lags several days. MO is quick.
MO is sometimes very noisy, so you need to draw or horizontal levels to compare with the previous cases.
For beginners, I recommend to use "MSI RSI".
Với tinh thần của TradingView, tác giả đã xuất bản tập lệnh theo mã nguồn mở, vì thế trader có thể dễ dàng hiểu và tùy chỉnh được. Bạn có thể sử dụng miễn phí, hoặc tùy chỉnh lại mã đã được cấp phép bởi Quy tắc Chung. Bạn có thể sử dụng nó trên biểu đồ.
wish you all the best.
(1) Correct. the chart above(smoother black line) is RSI of summation index not the summation index itself.
(2) Mathematically it's possible to calculate the SPX McClellan Oscillator if you know the advance/decline issues of each market index BUT tradingview does not provide adv/dec issues for SPX, so at the moment I cannot provide that. Sorry.
wish you all the best.