Indicator Based Market Exposure (IBME)
The Indicator Based Market Exposure (IBME) system was created by Big Wave Chartist as a way to navigate the markets using a confluence of three different signals to determine when the "internals" of the market are in your favor and how heavily invested to be at any point. The idea of the system is also to flash warning signs when the market internals are beginning to deteriorate so as to take a defensive stance. Of course this system can be strictly adhered to, or it can be incorporated into a more discretionary style of trading, and be combined with progressive exposure into (and out of) the market as positions gain (or lose) traction.
The IBME displays a straightforward action signal based on the combination of the 3 separate signals:
So let's get into the signals used:
McClellan Summation Index (MSI)
The McClellan Summation Index is a long-term version of the McClellan Oscillator, which is a market breadth indicator based on stock advances and declines. Interpretation is similar to that of the McClellan Oscillator, except that it is more suited to intermediate to major trends and related reversals. The McClellan Summation Index can be calculated as the sum of all the daily values of the McClellan Oscillator. This is used along with the 10-sma to watch for a crossover indicating an uptrend or downtrend beginning.
Net New Highs/Lows
This is the net number of stocks making 52-week highs or lows. For instance, if there are 60 new 52-week highs and 20 new 52-week lows, the net number will be 40 net new 52 week highs. This signal is particularly useful in gauging breadth.
Net New Highs Crossover
This is the description of NNHC from the original separate version of this indicator created by HikoStory: "Net New Highs can guide you to increase or decrease your exposure based on the current market health. They are calculated by subtracting the new highs from the new lows, based on all stocks of the...NASDAQ. A positive value shows that the market is doing good, since more stocks are making new highs compared to new lows. A negative value shows that the market is doing bad, since more stocks are making new lows compared to new highs. Combined with a moving average you can see crossovers that can warn you early when there is a change in the current market health."
The default index for the IBME is the Nasdaq.
The IBME is meant to be used on a daily time frame chart, therefore the signal will only show on a daily time frame chart.
Display options include:
The IBME displays a straightforward action signal based on the combination of the 3 separate signals:
- Green 🟢 Full size-longs permitted
- Yellow 🟡 Pilot positions permitted
- Red 🔴 No longs allowed
So let's get into the signals used:
- McClellan Summation Index
- Net New Highs/Lows
- Net New Highs Crossover
McClellan Summation Index (MSI)
The McClellan Summation Index is a long-term version of the McClellan Oscillator, which is a market breadth indicator based on stock advances and declines. Interpretation is similar to that of the McClellan Oscillator, except that it is more suited to intermediate to major trends and related reversals. The McClellan Summation Index can be calculated as the sum of all the daily values of the McClellan Oscillator. This is used along with the 10-sma to watch for a crossover indicating an uptrend or downtrend beginning.
Net New Highs/Lows
This is the net number of stocks making 52-week highs or lows. For instance, if there are 60 new 52-week highs and 20 new 52-week lows, the net number will be 40 net new 52 week highs. This signal is particularly useful in gauging breadth.
Net New Highs Crossover
This is the description of NNHC from the original separate version of this indicator created by HikoStory: "Net New Highs can guide you to increase or decrease your exposure based on the current market health. They are calculated by subtracting the new highs from the new lows, based on all stocks of the...NASDAQ. A positive value shows that the market is doing good, since more stocks are making new highs compared to new lows. A negative value shows that the market is doing bad, since more stocks are making new lows compared to new highs. Combined with a moving average you can see crossovers that can warn you early when there is a change in the current market health."
The default index for the IBME is the Nasdaq.
The IBME is meant to be used on a daily time frame chart, therefore the signal will only show on a daily time frame chart.
Display options include:
- Show/hide individual signals
- Table background/font color
- Table size/placement
릴리즈 노트:
Version 2 now includes the option to highlight the chart background to see historical as well as current IBME signal. Also added the recommended action into the table.
릴리즈 노트:
Version 3 brings a few major upgrades.
The IBME system has now been updated to take price action as well as the readings from the other 3 indicators when giving a signal. All of the signals can be found in this updated table, the current reading number will also be displayed next to the IBME action in the data table.
A 10/20ma Uptrend is referred to as price > 10sma > 20sma.
Added alerts to notify when the IBME signal has changed colors.
- Takes into account price action of the QQQ (default) to filter out potential false signals
- Alerts
- More signal combinations and current signal displayed
The IBME system has now been updated to take price action as well as the readings from the other 3 indicators when giving a signal. All of the signals can be found in this updated table, the current reading number will also be displayed next to the IBME action in the data table.
A 10/20ma Uptrend is referred to as price > 10sma > 20sma.
Added alerts to notify when the IBME signal has changed colors.
릴리즈 노트:
Update to show if an uptrend is confirmed in the individual signals table.
An uptrend for this IBME system is defined as 10sma > 20sma and price >10sma.
An uptrend for this IBME system is defined as 10sma > 20sma and price >10sma.
릴리즈 노트:
Added the option to have 'Tiny' as a table size.
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