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1988issue C091-10

Combining weekly and daily MACD divergences with on-balance volume

Daily MACD-Mo and MACD-H are read only after weekly MACD-Mo and MACD-H have set the intermediate trend. Editorial framing: a two-clock workflow lets the weekly regime grade each daily peak, uses a two-to-five-day histogram confirmation window to separate a rebound from a new upside leg, treats longer divergences as structurally important, and requires on-balance volume so a price-only MACD turn cannot stand alone.

  • Daily MACD-Mo and MACD-H are interpreted only after weekly indicators have already set the intermediate trend.
  • The weekly regime, the joint state of weekly MACD-Mo and MACD-H, classifies a short-term daily MACD-Mo peak as a long-exit event, a short-initiation setup, or noise.
  • A short-term positive daily MACD-Mo signal is incomplete unless daily MACD-H confirms it within two to five days; without that confirmation the move is a technical rebound, not a new upside leg.
  • Price-only MACD signals can be false or misleading, so weekly MACD-Mo and MACD-H are paired with demand studies such as on-balance volume.
Entries in this reading3 entries
Current trackOn-balance volume88 readingsMACD121 readingsPrice-indicator divergence167 readings

Read the weekly indicators first

MACD is a two-line moving-average convergence study read on both weekly and daily bars, then split into a momentum line and a histogram for timing. Daily MACD-Mo and MACD-H are interpreted only after the intermediate trend has first been read from weekly indicators.

MACD-Mo is the daily or weekly momentum reading used to mark zero-line crosses, short-term peaks, and the slope of momentum. MACD-H is the confirming companion to that momentum line.

How the weekly regime classifies daily peaks

The weekly regime is the joint state of weekly MACD-Mo and MACD-H that decides whether a daily peak is an exit, a short setup, or noise.

When weekly MACD-H and MACD-Mo are both positive, short-term daily MACD-Mo peaks are classified as long-exit events pending a new long-side signal. When both weekly MACD studies are negative, short-term daily MACD-Mo tops are classified as short-initiation setups.

When the histogram outranks momentum

When weekly MACD-Mo is declining while weekly MACD-H remains positive and rising, the histogram is given greater weight than the momentum line.

The daily confirmation window

A daily buy-side MACD-Mo turn is incomplete until the histogram agrees. The confirmation window is the two-to-five-day span in which daily MACD-H is expected to confirm a short-term positive MACD-Mo signal.

A short-term positive daily MACD-Mo signal is treated as incomplete unless daily MACD-H confirms it within two to five days. Lack of that confirmation is classified as a technical rebound rather than a new upside leg.

Editorial reading: that short window is what separates a rebound from a new upside leg.

Structurally important divergences

A divergence is a multi-week or multi-month disagreement between price highs or lows and the corresponding MACD-Mo or MACD-H peaks or troughs. Divergences of four to eight weeks on daily MACD-Mo and MACD-H, and four to six months on the weekly versions, are treated as structurally important.

Editorial reading: those longer disagreements mark structural exhaustion rather than ordinary short-term noise.

Percent trading bands with daily MACD

Daily MACD readings are combined with a 21-day moving average and plus-or-minus three-percent bands to locate intermediate trend and support or resistance. That envelope is the percent trading band used with daily MACD.

Rebounds against a negative weekly stack

Across the crude-oil, bond, and gold walk-throughs, brief daily MACD-Mo or MACD-H turns against a still-negative weekly MACD stack are classified as technical rebounds rather than new trend legs.

On-balance volume as a participation test

Weekly MACD-Mo and MACD-H are specified for use together with demand and volume studies, including on-balance volume. On-balance volume is a demand-style volume study paired with those weekly readings to test whether a price-only MACD signal has participation behind it.

Editorial reading: on-balance volume is required. A price-only MACD turn is not allowed to stand alone.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
7 of 61 in the On-balance volume track
19881-3 pp.Next on On-balance volumeRestoring the original tests for market breadth, on-balance volume, and trendlinesOverbought or oversold once meant buying or selling looked exhausted, with a sharp nearby reversal in prospect, not only that price had moved a long way in a short time.
All readings on this track · 61 readings
  1. 1988Cumulative volume trend and 200-session polarity
  2. 1988Three clocks when cumulative volume led price
  3. 1988Payoff index checkpoints for open interest and divergence
  4. 1988Relative strength, stochastics, and on-balance volume as a turning-point stack
  5. 1988Signing volume by open interest change
  6. 1988Case study: weekly on-balance volume with trendlines and a 21-period average
  7. 1988Combining weekly and daily MACD divergences with on-balance volume
  8. 1988Restoring the original tests for market breadth, on-balance volume, and trendlines
  9. 1989Evaluating volume-weighted breadth extremes
  10. 1989Demand oscillator construction with a momentum overlay
  11. 1989Constructing a volume percentage ratio from advance-decline flow
  12. 1990Constructing net positive volume as On-balance volume
  13. 1990Buying-share scale with on-balance volume
  14. 1990Friday-filtered on-balance confirmation lines
  15. 1991Constructing rate-market volume breadth from on-balance volume
  16. 1991Building a breadth composite from on-balance volume breakouts
  17. 1992Constructing a rate-complex volume-breadth index
  18. 1992Constructing a breadth index from on-balance volume
  19. 1992Constructing signed market thrust from issue volume
  20. 1992Constructing indicator phase across averages, volume and bands
  21. 1993Force on-balance volume to agree with itself at slower horizons
  22. 1993Three transforms of market thrust from breadth and volume
  23. 1994Constructing a tick-line momentum oscillator
  24. 1994Constructing a smoothed on-balance tick momentum oscillator
  25. 1994Histogram confirmation and a second-series veto for MACD-family alerts
  26. 1994Constructing a 40-period envelope on on-balance volume
  27. 1996Constructing a matched percent-B volume disparity
  28. 1997Constructing calendar regime overlays and volume-weighted rules
  29. 1997Constructing market thrust from breadth and volume
  30. 1997Constructing on-balance volume as a signed running total
  31. 1997A three-layer construction for a signed volume-force oscillator
  32. 1997Constructing a range-sum volume-force oscillator
  33. 1999On-balance volume confirmation, price-indicator divergence, and bounded exits
  34. 2000A daily long-only confirmation stack on the tether line
  35. 2000A three-filter tether and volume trend system
  36. 2003Constructing finite volume elements as a finite-period money-flow filter
  37. 2003Constructing on-balance volume from signed session volume
  38. 2003On-balance volume as a market-breadth participation ledger
  39. 2003Construct a volatility-adjusted on-balance volume filter before confirming a breakout
  40. 2004Opening and midday ranges as an on-balance-volume breakout case
  41. 2004Constructing a volatility-gated volume-flow measure
  42. 2004Constructing a volume-flow series from on-balance volume
  43. 2004Volume-flow indicator construction from on-balance volume
  44. 2004Volume-flow slope divergence, then separate on-balance-volume and crossover rules
  45. 2004Volume flow and band construction as one inspectable problem
  46. 2004Auditing advance-decline confirmation for scale, horizon, and composition
  47. 2005Bounded market breadth from the Arms index to BRIN
  48. 2006Overnight-hold entry and exit construction
  49. 2007Evaluating Volume-price confirmation versus On-balance volume and MACD
  50. 2009Volume confirmation versus a price advance
  51. 2010Typeahead retrieval of a moving average, on-balance volume, and a stochastic oscillator
  52. 2010Modified volume-price trend and log-price scale alignment
  53. 2010Constructing liquidity accelerometers from advance-decline averages
  54. 2012Failed short cycles as breadth and volume tests
  55. 2016Earnings straddles, implied volatility, and money-flow filters
  56. 2017A volume residual filter and a price projection matrix
  57. 2019Volume-volatility parabola and signed-volume momentum
  58. 2019Separating on-balance volume into breadth and volume
  59. 2020Constructing the obvm signal line
  60. 2020Constructing smoothed on-balance volume with a signal line
  61. 2020Keep neutrality as a first-class input in three-state market data
By fieldIndicators and filters874 readingsBy year1988116 readings
All 88 readings tagged On-balance volume
Also on On-balance volume5 readings
1994Histogram confirmation and a second-series veto for MACD-family alerts2007Evaluating Volume-price confirmation versus On-balance volume and MACD1988Payoff index checkpoints for open interest and divergence1988Three clocks when cumulative volume led price1989Constructing a volume percentage ratio from advance-decline flow