STIX [STIX]

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The STIX function determines the momentum of the market by calculating an exponential moving average of the ratio of advancing issues to declining issues. Parameters ------------------ Advancing Issues     The number of issues (securities) that closed above their opening price. Declining Issues       The number of issues (securities) that closed below their opening price. Note that while this function is intended for use with these specific values, any values can be used for these parameters, including preprocessed values or values for a subset of the market. Indicator Value ------------------------ The STIX indicator is calculated using a variation of Advance/Decline Ratio. The number of advancing issues is divided by the sum of the number of advancing and declining issues and multiplied by 100. This provides a relative percent of stocks which are advancing, not including unchanged issues. A 21-period exponential moving average is then taken for this value. The resultant value typical oscillates around 50. Since the STIX uses an exponential moving average, it will have values at the beginning of the data series. However, you may want to ignore values before the initial 21-day period. Usage ----------- The STIX indicator is useful for determining the momentum of the market. Values over 50 are generated when there have been more stocks advancing (increasing in price) than declining. Values less than 50 are generated when more stocks have been decreasing in price. This indicator makes a good overbought/oversold indicator for the market. The following table can be used to determine the general state of the market. Value        Meaning -------------------------------- > 58          Extremely Overbought 56 - 58      Overbought 45 - 56      No Meaning 42 - 45      Oversold < 42          Extremely Oversold In general, broad market indicators can be used for trading against broad market indices through options, futures, and mutual funds. They can also be used to increase the effectiveness of more specific signals by adding confirmation or warning of upcoming trends. Source ------------ This indicator is based on an entry in "Technical Analysis From A To Z" by Steven B. Achelis.