Info!! Ask Too Supply: Measures Of Stock Marketplace Momentum

Probably the or in addition to thus unique in addition to odd indicator I rail is a proprietary mensurate called Demand in addition to Supply. These measures are non available inward Blue Planet domain to my knowledge; I do, however, rail them each morn earlier the marketplace opened upwards inward my Twitter posts (free subscription here).

We tin intend of Demand in addition to Supply every bit momentum measures: Demand taps meaning upside momentum, Supply captures meaning downside momentum.

Significant momentum is defined past times a stock's closing higher upwards or below its Bollinger Band; i.e., higher upwards or below the volatility envelope surrounding its short-term moving average. The larger the number, the greater the let on of NYSE, NASDAQ, in addition to ASE stocks that are trading alongside meaning momentum.

This is useful inward identifying marketplace turns (as rigid momentum turns to weak momentum earlier reversing), in addition to it's useful inward identifying markets alongside considerable thrust that are probable to follow through inward the curt run.

In the nautical chart above, you lot tin meet how Supply (yellow line) peaked good ahead of cost in addition to how it petered out prior to the marketplace rally. We tin too meet Demand (pink line) soar early on inward the rally, suggesting considerable upthrust.

I'll survive posting to a greater extent than regarding applications of this odd indicator. For instance, when both Demand in addition to Supply are low, nosotros tend to convey a hit market. Pullbacks inward Demand in addition to bounces inward Supply stand upwards for practiced swing entry points inward trending markets. H5N1 cumulative trouble of the departure betwixt Demand in addition to Supply is the best overbought/oversold indicator inward my arsenal. (Note: it is updated each Mon every bit purpose of my indicator review; tomorrow's Cumulative Demand/Supply Indicator posting is peculiarly interesting). When a menses of rigid Demand is followed past times a spike inward Supply (as inward the 2d calendar week of February) or vice versa, nosotros typically meet a tendency change.

The centre thought behind Demand in addition to Supply is that momentum tends to exceed in addition to bottom ahead of price. Again, I volition survive posting much to a greater extent than on this topic after inward the week.
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