One job per lookback in a breadth-based option-income procedure

Two arrangements of the same four series

The archive starts with four daily breadth inputs: advancing issues, advancing volume, declining issues, and declining volume. Those inputs can be combined into a thrust oscillator whose daily value is confined to the interval from -1 to +1. The same four inputs can also be arranged as an issues-volume ratio that is bullish only between 0 and 1, with no theoretical upper bound on the bearish side and observed bearish readings above 10.

Editorial reading: treat the two arrangements as shared raw material. Do not treat them as interchangeable substitutes inside the same rule.

Unsmoothed readings and short smoothers

In the February to August 1992 window, unsmoothed daily oscillator readings mostly sat between -0.5 and +0.5 and were judged too jagged for overbought or oversold use. One-day readings near -0.9 lined up with index lows.

Four-day, 13-day, and 35-day averages were used as extremely short, short, and intermediate smoothers. In that window all three averages bottomed in April with the index, and a four-day reading at or above +0.5 was treated as a short-term top condition.

Editorial reading: the four-day average may propose a short-term top. The 13-day and 35-day averages in that window are not given the same job.

Longer lookbacks and a 21-day and 55-day pair

In the 1987 window the 35-day average peaked in July, later diverged from the index, and crossed below zero in September. An 89-day average also crossed below zero several sessions before 16 October 1987. A 150-day average crossed only after that date and was judged too long for that episode.

Across a 13-year review window, a 21-day average of the oscillator reaching -0.3 coincided with a significant market bottom in progress on six occasions. A reading above +0.3 on that same average was not treated as a matching top signal.

A 21-day and 55-day pair supplied a trend-direction rule. At the August 1982 and December 1987 bottoms the 55-day average diverged from price one to two months after the 21-day average exceeded -0.3. A 55-day zero-line cross was treated as more informative after a same-direction 21-day zero-line cross.

Editorial reading: the 21-day average may propose a bottom-in-progress state at -0.3. The 55-day average may confirm trend direction or delay that confirmation. It does not reopen a top question that the 21-day average was never assigned.

Shape correspondence with a windowed advance-decline series

A 13-day average of the oscillator closely tracked a 13-day windowed advance-decline series, sometimes crossing zero one to four days earlier or later. Similar shape correspondence appeared at 30-day and 150-day lengths in the 1979-80, 1982-83, and 1990-92 windows.

Editorial reading: shared shape is not a license to swap the windowed advance-decline series into the option-income procedure in place of the oscillator.

Scoring the option-income procedure, including standing aside

The documented option-income procedure treated a four-day issues-volume-ratio average below 0.7 and outside a 15 percent lower band of the 13-day average as a short-term condition that specified selling calls, buying puts, or using a spread. It treated a four-day average above 1.3 outside the upper band as a short-term bullish condition. Those band events typically appeared one to three days before the index move.

Percentage bands around a 13-day average of the thrust oscillator were too narrow to use. The fallback procedure acted only when the four-day average crossed the 13-day average in the direction of the 13-day average and required a separate index-based confirmation before an option trade.

Editorial reading: if the named averages do not meet a stated condition, or if the index confirmation is missing, the procedure stands aside. Abstention is part of the score, not a gap in the rule set.