Short Term IndeXThe Short-Term Index (STIX) is a simple market indicator designed to assess short-term overbought or oversold conditions in the stock market. Leveraging a combination of advancing and declining issues, STIX provides valuable insights into market sentiment and potential reversals. To enhance its interpretability and reveal the underlying trend with greater clarity, STIX has been refined through a Heiken-Ashi transformation, ensuring a smoother representation of market dynamics.
Calculation and Methodology:
stix = ta.ema(adv / (adv + dec) * 100, len)
STIX is calculated by dividing the difference between the sum of advancing issues (ADV) by the total number of issues traded (ADV + DEC). This quotient is multiplied by 100 to express the result as a percentage. The STIX index ranges from 0 to 100, where extreme values indicate potential overbought (mainly above 60) or oversold (mainly below 40) market conditions.
Heiken-Ashi Transformation:
By applying a Heiken-Ashi transformation to STIX, the indicator gains improved visual clarity and noise reduction. This transformation enhances the ability to identify trend shifts and potential reversal points, making it an even more valuable tool for traders and investors.
Utility and Use Cases:
-The Short-Term Index (STIX) offers a range of practical applications-
1. Overbought/Oversold Conditions: STIX provides a clear indication of short-term overbought or oversold conditions, helping traders anticipate potential market reversals.
2. Reversal Points: STIX can help pinpoint potential reversal points in short-term market trends, providing traders with opportunities to enter or exit positions.
3. Trend Analysis: By observing STIX values over time, traders can assess the strength and sustainability of short-term trends, aiding in trend-following strategies.
The Short-Term Index (STIX), enhanced by its Heiken-Ashi transformation, equips traders and investors with a tool for assessing short-term market conditions, confirming price movements, and identifying potential reversal points. Its robust methodology and refined presentation contribute to a more comprehensive understanding of short-term market dynamics, enabling traders to make well-informed trading decisions.
See Also:
- Other Market Breadth Indicators-
Marketbreadthindicator
Bolton-Tremblay IndexThe Bolton-Tremblay Index (BOLTR) is a dynamic cumulative advance-decline indicator which incorporates the count of unchanged issues as a fundamental element. This index serves as a valuable tool for identifying shifts in market trends and gauging the overall strength or weakness of the market. To enhance its effectiveness and reveal underlying trends, BOLTR has been refined through a Heiken-Ashi transformation, resulting in a smoother and more insightful representation.
Calculation and Methodology:
r = (adv - dec) / unch
var float bt = na
bt := r > 0 ? nz(bt ) + math.sqrt(math.abs(r)) : nz(bt ) - math.sqrt(math.abs(r))
The BOLTR index is derived from a calculation involving three essential components: advancing issues (ADV), declining issues (DEC), and securities with unchanged closing prices (UNC). By formulating the ratio (ADV - DEC) / UNC, BOLTR captures the relationship between market movements and unchanged securities. This ratio then dictates whether the BOLTR index increases or decreases in the following period. If the ratio is positive, the index advances, and if negative, it retreats. This iterative process yields a cumulative index that reflects the evolving dynamics of market trends.
Heiken-Ashi Transformation:
The addition of a Heiken-Ashi transformation imparts a smoothing effect to the BOLTR index, revealing the underlying trend with greater clarity. This transformation diminishes noise and fluctuations, making it easier to identify meaningful shifts in market sentiment and overall market health.
Utility and Use Cases:
-The Bolton-Tremblay Index offers a range of applications that contribute to informed decision-making-
1. Trend Analysis: BOLTR provides insights into the changing trends of the market, helping traders and investors identify potential shifts in market sentiment.
2. Market Strength Assessment: By considering advancing, declining, and unchanged issues, BOLTR offers a comprehensive assessment of market strength and potential weaknesses.
3. Divergences: Traders can use BOLTR to detect divergences between price movements and the cumulative advance-decline dynamics, potentially signaling shifts in market direction.
The Bolton-Tremblay Index offers a versatile toolset for interpreting market trends, evaluating market health, and making better informed trading decisions.
See Also:
- Other Market Breadth Indicators-
S&P Sector Advance/Decline Weighted -Tom1traderEnjoy, enhance your trading (I hope), copy or adapt to your needs and keep smiling!
Thanks to @MartinShkreli. The sector variables and the "repaint" option (approx lines 20 through 32 of this script) are used directly from your script "Sectors"
RECOMMENDATION: Update the sector weightings -inputs are provided. They change as often as monthly and the
annual changes are certainly significant. When updating weighting percentages use the decimal value. I.E. 29% is .29
Good on any time frame. Especially SPY, SPX and ES scalpers and 0DTE options traders may like this a lot.
This gives good signals on S & P and related (ES, SPY) and indicates / plots differently than the AD line or ratio.
Each sector's entire % weight is added or subtracted depending of whether that sector advanced or declined.
Example: Information Tech weight at 29% so that % of 500 (145) is added if InfoTech is up a penny and subtracted if it is
down a penny. All sectors processed the same way so that for a given bar/candle the value will be between +500 (all
sectors up) and -500 (all sectors down). This weighted AD line of sectors is scaled to +/- 350 and plotted as a red/green line
along with aqua/fuchsia columns of its 5 period ema. The line is actual sector behavior and the columns seem to make a
good signal with column zero crosses standing out.
The columns aqua / fuchsia are a 5 period ema of the Sector AD line and give pretty good signals at
zero cross for SPX. I colored the AD red green line also to emphasize the times it opposes the ema
for example the histo/colums zero cross signal is NOT true when the AD line is showing all or most sectors
going the other way.
For readability, the AD line itself is scaled to 350. This lets the columns of the ema stand out better. The hlines at
350 and at 175 give an idea for the AD green red line how much of the sector's weight is up or down.
350 is all sectors up (advancing) and -350 is all sectors down (declining). The hlines at +/- 175 seem to outline
a more or less "neutral" zone. For example in an uptrend with most of the AD level positive and the columns positive;
a negative spike that does not pass the -175 line and returns positive does not seem to impact the price as much as
a deeper negative spike.
Zweig Market Breadth Thrust Indicator StrategyThe Breadth Thrust Indicator is a technical indicator which determines market momentum, signaling the start of a potential new bull market.
The Breadth Thrust Indicator was developed by Martin Zweig, an American stock investor, financial analyst, and investment adviser. According to Zweig, the concept is based on the principle that the sudden change of money in the investment markets elevates stocks and signals increased liquidity. In other words, this indicator is all about how quickly the NYSE's advancing and declining numbers go from poor to great in a compressed time period.
A "Thrust" indicates that the stock market has rapidly changed from an oversold condition to one of strength, but has not yet become overbought. This is very rare and has happened only a few times. Dr . Zweig also points out that most bull markets begin with a Breadth Thrust.
More info can be found at www.investopedia.com
I have inspired by indicator introduced in TradingView by LazyBear and adopted the logic from there. Thanks LazyBear !!!
Though indicator signals the new Bull market, but I have not found much information how to use it in daily market. So I had come up with a strategy, which would allow us to trade SPY, QQQ , AMEX and securities under these markets.
I have used MA setting as 65 (since Zweig indicator setting was 10 days , based on that I set 65 for Hourly chart ... 10d x 6.5 Hrs = 65 in my startegy). You have to change this setting if you change the timeframe. Also , note that this strategy is for Stock Market only.
Strategy Rule/Settings
===================
Select the market type based on your security symbol.
SPY => use NYSE
QQQ => use NASDAQ
any other security => check exchange it was listed and select the corresponding market.
if you dont know , use COMBINED option
BUY
====
when indicator cross 0.40 from below
Note:
1. see how well it picks the bottoms ... example : Nov 2020 ....
2. setting 0.45 is also produces good results , only thing is you get more signals.
EXIT
=====
Exit when indicator cross down from 0.60 . I have used RSI (5) for partial exits. These two are available in settings
Close the whole position when indicator crossing down 0.40
STOP LOSS
=========
defaulted to 5%
Please Note , I have tested SPY , QQQ on Horly chart with MA 65. You need to chnage the MA setting based on your time frame and check the results.
WARNING
========
For the use of educational purposes only
