No single indicator will accurately forecast or coincide with every
market top or bottom. Here, two indicators have been combined to form one
indicator that can increase your chances of identifying buy or sell points.
As a student of the market, I have
crunched a few numbers over the years. At the same time I have tried, and
cautioned others also, to avoid the temptation to divide one number by another
or multiply one number by another simply because we can.
Not every calculation involving market indicators enjoys any real purpose. In
addition, many indicators react in a manner similar to other indicators. Almost
all overbought/oversold indicators tend to get more oversold as the market
declines and more overbought as the market rallies. So stringing together more
than a handful of similar indicators does not necessarily provide any additional
benefit.
The AIQ EDS code for Jay Kaeppel’s Jkhl indicator discussed in his article in this issue, “The JK HiLo Index,” can be downloaded from www.TradersEdgeSystems.com/traderstips.htm.
AIQ SYSTEMS, THE JK HILO INDEX. This chart shows the JKHL indicator on a chart of the S&P 500 index together with a 200-bar moving average.
! THE JK HILO INDEX
! Author: Jay Kaeppel, TASC October 2011
! Coded by: Richard Denning 8/12/2011
! www.TradersEdgeSystems.com
! HIGH-LOW INDICATORS:
! JKlogic:
NewH is TickerUDF(“OCEXCH”,[New Highs]).
NewL is TickerUDF(“OCEXCH”,[New Lows]).
Adv is TickerUDF(“OCEXCH”,[Adv Issues]).
Dec is TickerUDF(“OCEXCH”,[Dec Issues]).
Unch is TickerUDF(“OCEXCH”,[Unch Issues]).
Tot is Adv + Dec + Unch.
PctNH is (NewH / Tot) * 100.
PctNL is (NewL / Tot) * 100.
HLidx is min(PctNH,PctNL).
avgHLidx is simpleavg(HLidx,10).
! JK VERSION OF HIGH LOW LOGIC INDICATOR:
JKlogic is iff(avgHLidx > 2.15 or avgHLidx < 0.40,avgHLidx,1).
! JK NEW HIGH PERCENT:
JKnH is simpleavg(NewH / (NewH + NewL),10).
! COMBINED TWO JK INDICATORS:
!Plot as single line with upper 90 lower 20 support
JKHL is JKlogic * JKnH * 100.
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