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Summation Index - NASI (Nasdaq) & NYSI (NYSE)


Definition:

The NASDAQ McClellan Summation Index ($NASI) and the NYSE McClellan Summartion Index ($NYSI) look at the gap between the number of advancers and decliners on the Nasdaq and NYSE to give a net positive or negative number that indicates how overbought or oversold the market on a given day.

Using the NASI and NYSE:

The NASI is very good at predicting the intermediate Nasdaq trend of about 1 - 3 months as is the NYSI for the NYSE. Buy and sell signals are triggered when the the NASI and NYSI change direction.

The NASI is very useful as a general market indicator and could be used to swing trade QQQ, NQ futures, or an agressive growth mutual fund.

The NYSI is very useful as a general market indicator for the NYSE.

Use the following as buy/sell triggers to determine a change in the NASI and NYSI trends:

1. 5 MA crossover or Parabolic SAR buy/sell signal:

2. MACD crossover:

3. Stochastics crossover of 20 for a buy signal or below 80 for a sell signal


Charts of the NASI:

Uses the 5 MA as a buy signal, but can whipsaw quite a bit.
Uses Parabolic SAR for crossovers, less sensitive than the 5 MA, Can still whipsaw quite a bit to give buy/sell signal back to back
USES a wider Parabolic SAR for crossovers - Much less noise but buy/sell signals can be delayed slightly, very little whipsaw


Charts of the NYSI:

Uses the 5 MA as a buy signal, but can whipsaw quite a bit.
Uses Parabolic SAR for crossovers, less sensitive than the 5 MA, Can still whipsaw quite a bit to give buy/sell signal back to back