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1999issue C101-3

Second-stage MACD on relative-strength inputs

The featured construction applies a MACD difference line and a slower signal average to a relative-strength series rather than to raw price. Archive recipes build that series either as pairwise relative strength from two closes or as a bounded RSI input.

  • Second-stage MACD is a difference line and a slower signal line computed on a derived relative-strength series rather than on raw price.
  • Pairwise relative strength uses a paired chart, typically one equity series against one index series, and may apply ratio normalization so issues share a common numeric origin or terminus.
  • A bounded RSI input can fill the same second-stage slot after a Wilder-smoothed oscillator is built from separated one-period up and down changes.
  • Editorial view: a two-instrument price ratio and a bounded RSI can share one relative-strength label while they differ in units, scale, and default lengths.
Entries in this reading2 entries
Current trackMACD115 readingsRelative Strength Index186 readings

MACD on a relative-strength series

The featured construction applies a MACD difference line and a slower signal average to a relative-strength series rather than to raw price. In that form, second-stage MACD is only those two traces: the difference line is the fast exponential average minus the slow exponential average of the chosen relative-strength series, and the signal line is a further exponential average of the difference line, used as a comparison trace.

Pairwise relative strength

One two-instrument recipe forms relative strength from a length-10 lagged close ratio and a current close ratio scaled by 100, then feeds that series to a 12/25 MACD with a 9-period signal. The two-instrument version is described as requiring a paired chart, typically one equity series against one index series.

A spreadsheet version forms a 100-scaled price-to-index ratio, a 14-period lagged counterpart, then a 12-minus-25 exponential difference and a 9-period signal.

Ratio normalization

An issue-to-index price ratio is described as unnormalized, so its numeric range differs across issues. Dividing by the same ratio at another date can force the series to start or end at 100, or a 100-session lookback can be used. That rescaling is ratio normalization: successive issues then share a common numeric origin or terminus.

One formula set states that ordinary MACD is a 12-period minus 25-period exponential average of close, and the relative-strength version substitutes the normalized ratio for close.

Bounded RSI input

A second recipe first builds a bounded RSI input: a Wilder-smoothed oscillator from positive and negative one-period rates of change, with an adjustable lookback defaulting to 14 and bounded between 3 and 100. It then takes 12- and 25-period exponential averages and a 9-period signal.

A three-row worksheet version computes a 14-period RSI of close, a 12/26 MACD on that RSI row, and a 9-period signal of the MACD.

Worksheet, spreadsheet, and wizard forms

A wizard-style workflow allows changing MACD defaults of 12 and 26 and signal defaults of 9, 12, and 26, then replacing close with a relative-strength series against a second instrument. The archive therefore keeps one second-stage MACD label while the first-stage series, the lag used for scale, and the default average lengths are not the same in every recipe.

MACD of Microsoft relative strength versus the S&P 500

Microsoft’s close (upper pane) rose from the low thirties into the nineties while the lower pane tracks the MACD difference of pairwise relative strength versus the S&P 500 and its slower signal average. Both oscillator lines stay near a few thousandths, dip below zero around the late-1998 and early-1999 pullbacks, then peak near 0.0023 in April 1999 as the stock led the index. Values were read off the NeuroShell Trader chart, not from a printed table.
Microsoft’s close (upper pane) rose from the low thirties into the nineties while the lower pane tracks the MACD difference of pairwise relative strength versus the S&P 500 and its slower signal average. Both oscillator lines stay near a few thousandths, dip below zero around the late-1998 and early-1999 pullbacks, then peak near 0.0023 in April 1999 as the stock led the index. Values were read off the NeuroShell Trader chart, not from a printed table.MSFT versus S&P 500 · daily · 1998-01-01T00:00:00.000Z to 1999-07-31T00:00:00.000Z

NeuroShell applied MACD(12,25) and a 9-period signal to Relative Strength(Close, S&P 500). The raster is coarse, so coordinates are approximate and were sampled monthly.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
20 of 80 in the MACD track
19991-4 pp.Next on MACDConstructing MACD from exponential-average spreads for crossover and divergenceThe fast line is a shorter exponential average of price minus a longer one, with 12-period and 26-period lengths presented as the usual pair, and the signal line is a nine-period exponential average of that fast line.
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 year199959 readings
All 115 readings tagged MACD
Also on MACD5 readings
1995Consensus presignal filters for Relative Strength Index, MACD and the Stochastic oscillator1999Coding candlesticks into numeric indicators2002Building classic divergence filters from RSI and MACD2002Constructing channel-normalized Fisher reversal signals2002Separate bounded and trend-following oscillator rules