Market Sentiment Indicator.
The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?
I regard the future as essentially unknowable. Anyone can make guesses as to what might happen, but that is all we can do. Guess. Why waste time and effort futilely striving to predict what the market might do in the future? An accurate and objective assessment of the current market state is more useful than any forecast. Sooner or later, experience teaches you that forecasting is not necessary in order to react logically to changing market conditions. All you have to do is act appropriately as each day presents itself. My objective is to assess the market direction day by day without any preconceived notions as to what it "ought" to be doing. Without any Bullish or Bearish bias. My aim is to get as close as possible to total objectivity.
To this end I have developed a new oscillator, a "Market Sentiment Indicator". It is a composite indicator which is derived from a combination of other indicators. Each of the constituent indicators is itself a "compilation indicator" formed by using a very wide range of time periods on standard indicators and tabulating the results. This means that there is no backtesting, no optimisation and no search for the "best" time period for each indicator. "All" time periods are used.
The Index is charted in different colours which are controlled by the MSI plot as per the inset table.
http://h1.ripway.com/78963/DJIA829.gif