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2013issue C1156-58

Constructing next-bar MACD reversal prices

A reverse construction can return the implied next-bar price required for the MACD histogram to equal zero, for MACD to hold its current-bar value, or for MACD to cross its signal line. Implied-price formulas are specified for exponential and simple-average MACD, with worked lookbacks of 12, 26, and 9.

  • A reverse construction can return the implied next-bar price at which the MACD histogram would equal zero.
  • The same inversion can target a chosen MACD level, including zero or the current-bar value, and can plot a histogram-zero target, a level-hold target, and a signal-cross target together.
  • Implied-price formulas are specified for exponential MACD and for simple-average MACD, using lookbacks of 12, 26, and 9 and a smoothing constant of 2 divided by one plus the average length.
  • An example workflow places a next-bar stop at the histogram-zero target or the signal-cross target instead of waiting for the oscillator to print.
Entries in this reading1 entry
Current trackMACD115 readings

Solve MACD for a price on the forming bar

A reverse construction can return the implied next-bar price required for the MACD histogram to equal zero. That histogram-zero target is the solved price on the forming bar that would make the histogram print at zero.

The same inversion can target a chosen MACD level, including zero or the current-bar MACD value. The level-hold target is the implied next-bar price at which MACD would reprint its current-bar value.

Three implied next-bar prices

One study can plot three implied next-bar prices: MACD at zero, MACD unchanged from the current bar, and MACD crossing its signal line. Those three prices are the histogram-zero target, the level-hold target, and the signal-cross target.

The signal-cross target is the implied next-bar price at which MACD would cross its signal line.

Exponential and simple-average variants

Implied-price formulas are specified for both exponential MACD and simple-average MACD. Simple-average MACD is built from simple rather than exponential moving averages and has its own reverse-price formulas.

Worked constructions use lookbacks of 12, 26, and 9 for the short average, long average, and signal line. Exponential reverse-price formulas apply a smoothing constant of the form 2 divided by one plus the average length.

Inputs and an example stop workflow

Configurable inputs include the price series, fast period, slow period, signal period, averaging type, and whether to shift the implied-price plot.

An example workflow places a next-bar stop at the implied histogram-zero or signal-cross price rather than waiting for the oscillator to print.

AAPL daily next-bar MACD reversal prices, EMA 12-26-9

On the published eSignal daily AAPL chart, the orange line is the next-bar price that would make MACD meet its signal (histogram zero), the blue line is the next-bar price that would drive MACD itself to zero, and the green line is the next-bar price that would leave MACD unchanged. A trader can treat those three levels as accept-or-reject stops before the bar closes. At the labeled 24 Sep 2012 session the close is 673.54 while the signal-cross price sits at 704.81 and the MACD-zero price at 514.28, consistent with a slightly negative histogram (−1.98) that still needs a rally for a zero print. Earlier points were read off the dollar scale of that same figure.
On the published eSignal daily AAPL chart, the orange line is the next-bar price that would make MACD meet its signal (histogram zero), the blue line is the next-bar price that would drive MACD itself to zero, and the green line is the next-bar price that would leave MACD unchanged. A trader can treat those three levels as accept-or-reject stops before the bar closes. At the labeled 24 Sep 2012 session the close is 673.54 while the signal-cross price sits at 704.81 and the MACD-zero price at 514.28, consistent with a slightly negative histogram (−1.98) that still needs a rally for a zero print. Earlier points were read off the dollar scale of that same figure.AAPL · Daily · 2012-06-11T00:00:00.000Z to 2012-09-24T00:00:00.000Z

Screenshot study settings are Close, 12, 26, 9, EMA. The three right-edge labels (Close 673.54, orange 704.81, blue 514.28) and the session stamp 09/24/2012 are exact; all other prices are digitized from the 25-dollar grid and rounded to five dollars. Dates before 24 Sep 2012 are placed from the Jul/Aug/Sep axis marks and are good to about a week.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
67 of 80 in the MACD track
201359-62 pp.Next on MACDConstructing inverted MACD reversal pricesThe inverted MACD construction returns three prices: PMACDsignal for a MACD-signal or histogram-zero cross, PMACDlevel for a chosen MACD value, and PMACDeq for an unchanged MACD reading.
All readings on this track · 80 readings
  1. 1988Rebuild MACD-Mo and MACD-H before treating them as signals
  2. 1989Four-span MACD lookbacks as perishable parameters
  3. 1989Weekly then daily MACD confirmation on individual stocks
  4. 1991Regime-gated MACD and stochastic rules inside a checklist
  5. 1991Constructing MACD signal lines and divergence tests
  6. 1991MACD parameter order and cycle phase lag
  7. 1992Lengthened bond MACD as an equity regime filter
  8. 1992Long-horizon MACD construction from paired exponential averages
  9. 1993Constructing a signed ten-point trend filter
  10. 1994Constructing lag-reduced double exponential averages for MACD
  11. 1994Seeding DEMA2 filters to build a MACD signal
  12. 1994Constructing MACD from lag-reduced exponential averages
  13. 1994TEMA1 from nested exponential averages, then a two-horizon MACD
  14. 1994Constructing entry and exit on a relative-strength MACD
  15. 1994Constructing a relative-strength MACD crossover spreadsheet
  16. 1995Consensus presignal filters for Relative Strength Index, MACD and the Stochastic oscillator
  17. 1997Confirm the MACD turn with price, then exit on the histogram
  18. 1997Reconstructing a stochastic oscillator, MACD, and a triple-smoothed oscillator
  19. 1997Moving-average windows before crossovers and MACD
  20. 1999Second-stage MACD on relative-strength inputs
  21. 1999Constructing MACD from exponential-average spreads for crossover and divergence
  22. 1999Coding candlesticks into numeric indicators
  23. 2001Second-low confirmation with a percentage oscillator and money-flow filter
  24. 2001Constructing MACD from exponential average spreads and a signal line
  25. 2002Separate bounded and trend-following oscillator rules
  26. 2002Sort the regime before assigning MACD and stochastic jobs
  27. 2002Building classic divergence filters from RSI and MACD
  28. 2002Weekly highs and lows as trend gates
  29. 2002Constructing channel-normalized Fisher reversal signals
  30. 2002Affine-price and the Fisher transform as a constructed companion to MACD
  31. 2003Regularized EMA construction with a MACD line and a thrust oscillator
  32. 2003Curvature-penalized exponential averages versus MACD
  33. 2003MACD, moving averages, and a trend filter as one timing system
  34. 2003Fractional MACD and linear-regression reversal construction
  35. 2004Weekly MACD-histogram timing of bear-market rallies
  36. 2004Candlestick triggers filtered by MACD divergence
  37. 2004Staging energy-complex tops with trendline, breakout, and MACD
  38. 2005Selling climax holds versus fails
  39. 2006Treat a sideways Wave as permission before a breakout
  40. 2007MACD with a Stochastic oscillator for spotting trend reversals
  41. 2007Rebuilding an S&P 500 fifth-wave count after a broken target
  42. 2007Constructing MACD, RSI, and stochastic confirmation for futures
  43. 2007MACD histogram divergence needs a confirming close
  44. 2007Write the plan as a stack: ratio, boundary, then oscillators
  45. 2008MACD divergence and Stochastic oscillator confirmation on lumber futures
  46. 2008Assign confirmation, timing, and a stop before a currency pair is tested
  47. 2008Confirm the ten-bagger launch path before the MACD exit
  48. 2008Reading the offloaded evidence file
  49. 2008A Leader companion for MACD direction warnings
  50. 2008Relative strength exits with MACD averages and RSI
  51. 2008Assign one job per indicator in a three-screens rule set
  52. 2008Sequencing RSI, MACD, and average crossovers
  53. 2010Constructing the Schaff Trend Cycle from MACD and a dominant-cycle window
  54. 2010Schaff Trend Cycle as a MACD and Stochastic oscillator combination
  55. 2010Combining Relative Strength Index, the stochastic oscillator, and MACD as slope filters
  56. 2010Short-term wave and ratio clues without direction calls
  57. 2010A precise pullback entry and an unplanned profit-protection exit
  58. 2010Filtering MACD false signals with trendline breaks
  59. 2011Vendor feeds as an input variable in a MACD evaluation
  60. 2012Out-of-the-money versus in-the-money option sensitivity to implied volatility
  61. 2012MACD window tuning as hold-time control
  62. 2012Combining a moving-average crossover with MACD and support-resistance
  63. 2012Testing a published MACD entry with a histogram and signal-line agreement filter
  64. 2012Treat sample systems as a lab before live rules
  65. 2013Constructing moving averages and MACD from one price series
  66. 2013The next-bar price that forces a MACD signal-line cross
  67. 2013Constructing next-bar MACD reversal prices
  68. 2013Constructing inverted MACD reversal prices
  69. 2014Shared-filter combinations of the stochastic oscillator, MACD, and RSI
  70. 2014Square-root lookbacks for combined MACD and RSI
  71. 2015Audit open interest and trend before trusting oscillator crossovers
  72. 2016MACD without a signal line, confirmed by moving-average trend filters
  73. 2016Use RSI, MACD, and a moving average as a market-health consensus
  74. 2016MACD line versus histogram is a display problem first
  75. 2017Weekly and daily MACD on a single daily chart
  76. 2017Weekly and daily MACD as a stacked momentum filter
  77. 2017Nested weekly and daily MACD from paired EMA spreads
  78. 2018Weekly and daily PPO scale versus MACD, with bounded RSI and stochastic readings
  79. 2018Constructing a weekly and daily percentage price oscillator
  80. 2020Constructing Wyckoff tape reading with MACD, moving-average, and RSI filters
By fieldIndicators and filters682 readingsBy year201398 readings
All 115 readings tagged MACD
Also on MACD5 readings
1988Rebuild MACD-Mo and MACD-H before treating them as signals1988Weekly MACD as a two-clock momentum confirmation stack1989Four-span MACD lookbacks as perishable parameters1989Weekly then daily MACD confirmation on individual stocks1990Constructing a lag-aligned triangular MACD