List of Market Indicators
A series of technical indicators used by traders to predict the direction of the major financial indexes. Most market indicators are created by analyzing the number of companies that have reached new highs relative to the number that created new lows, also known as market breadth. By weighing those indicators showing Bullish signs against those showing Bearish signs, you are able to weigh your risk in the current market.
LIST OF THE BEST MARKET INDICATORS
1) Percent of S&P 100 Stocks Above 200 Day Moving Average: Many consider this the best indicator available of a market sweet spot for positive results.
2) DOW Relative Strength Index RSI: A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. When RSI is above 50, it is considered a positive indicator for market direction. It is calculated using the following formula:
RSI = 100 – 100/(1 + RS*)
*Where RS = Average of x days’ up closes / Average of x days’ down closes.
3) NYSE MACD
: A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the “signal line”, is then plotted on top of the MACD, functioning as a trigger for buy and sell signals. The black line above red is a positive indicator.
4) NYSE Fast Stochastic
: The stochastic momentum oscillator is used to compare where a security’s price closed relative to its price range over a given period of time.
5) NYSE McClellan Oscillator
: The McClellan Oscillator
offers many types of structures for interpretation, but there are two main ones. First, when the Oscillator is positive, it generally portrays money coming into the market; conversely, when it is negative, it reflects money leaving the market. Second, when the Oscillator reaches extreme readings, it can reflect an overbought or oversold condition.
6) Advance/Decline Line
: Every day that stocks are traded, financial publications list the number of stocks that closed higher (advances) and that closed lower (declines). The difference between these numbers is called the daily breadth. The running cumulative total (starting at 0) of daily breadth is known as the Daily Advance-Decline Line
. It is important because it shows great correlation to the movements of the stock
market, and because it gives us another way to quantify the movements of the market other than looking at the price levels of indices.