SUM Index

Some observations on the Summation Index.
I've added 300 day 2&3 stdev Bollinger Bands. The long period helps to smooth out the neutral zone (currently around +2000 instead of 0) Also, the changeover from fractional trading to decimal trading (2001) has altered the volatility and extremes because the AD line just registers Up, Down or Unchanged and there are fewer indecisive days. This shows up on the chart that goes back to 1950. Generally when the SUM Index tags the Bollinger Bands it's good to start looking for a reversal.

The DJIA and the NYSE Summation Index
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The DJIA and the NYSE Summation Index
950 to the present Log scaled
Click to enlarge