Weekly advance-decline oscillator: weight map, extremes, and spike cycle

A weekly series from advancing minus declining issues

The weekly advance-decline oscillator is the difference between a 40% exponential and a 22% exponential of weekly advancing minus declining issues.

The daily form was described as the deviation of a 10% exponential from a 5% exponential of daily advancing minus declining issues.

Exponential weight map

A four-week average was treated as the weekly counterpart of a 20-day average, and an eight-week average as the counterpart of a 40-day average.

That pairing is the exponential weight map: weekly smoothing constants are chosen so they stand in for stated multi-week average lengths that correspond to a daily lookback.

Zero-line rule

The zero-line rule is a signal definition that uses a change in the sign of the oscillator, not its distance from zero.

Zero-line crossovers were checked as directional forecasts over one week, five weeks, 13 weeks, 26 weeks, and one year.

Deviation band

Unusual highs and lows were defined with both a full standard deviation and two-thirds of a standard deviation around zero. Those high and low thresholds are the deviation band.

The full-standard-deviation weekly thresholds used for the five-week check were +280 and -280.

A TradersWeek editorial reading keeps these two rules apart. A sign change answers a different question than a move that reaches a deviation band.

Spike cycle

A regularly recurring pattern of upward and downward spikes was noted. The median cycle length on the charted span was estimated at 18 weeks.

That visual estimate of the typical spacing between successive extreme peaks or troughs is the spike cycle.

A TradersWeek editorial reading places this count last. It is a hypothesis about spacing on the charted span, not a substitute for the zero-line rule or the deviation band, and not itself a directional forecast.