Ok, Richard. This is one still a bit under construction -- called the ZMCS.
the indicator formula is:
(MFI(3)+((CCI(3)+100)/3)+Fml("StocRSI(5,3)"))/3
where StocRSI(5,3) uses exponential smoothing (sorry about that, Andy)
It is strictly short-short term, meaning 1-3 day positions (well suited to the tenor of recent WS tunes). In MSWIN along with your trusty MACD series, Stoch(55,21) and StocRSI(13) plot this in a separate window along with Will%R(14), using opposite side scaling.
The key is to look for a semi-horizontal "hitch" during downtrends to call reversals with Will%R rising from anywhere below -20 (remember, MSWIN uses a funky inverted negative scaling from -100 oversold to 0 overbought for Will%R) or pulling a lateral hitch from a downtrend itself (that's when it's most "powerful"-- especially if your confirmation indicators corroborate). Also note any slight angular trajectory changes in the ZMCS indicator when working against the other indicator primary trends, this strongly suggesting a price reversal.
ZMCS min value often reaches fractional levels short of 0, sometimes only dips to ~20, but bounces are usually imminent at that point once confirmed with a Will%R upturn. Max value achieved is 88.889 on many stocks -- tho some only reach 82-86 before reversals. About 75% of the time a value of 88.889 calls THE last day of a 3-8 day cycle unless everything else is poised for continuation. Like a short stochastic, it can sustain +80 values for extended periods of strength, but that's not it's purpose. Trading system integration would have you use it as a sell signal on any value > 81.
Mostly its a trading environs tool vs. trending. Any fine tuning suggestions and extrapolations gladly accepted.
Craig |
