Indicator for distance above a moving average?

IntelligentValue
IntelligentValue ✭
in SharpCharts
Right now (12/04/2017) there are several major indices that are very far above their 200-day moving averages. Historically, when this happens a correction takes place. I cannot find anything, but are there any tools I can use to identify on a chart the times through history that the $SPX was a great distance above its 200-day MA?

I am thinking of something similar to ROC, that I can map on a chart to show the number of times that an index moved more than 10% in 10 day days, for example. Perhaps a combination of existing indicators?

Thank you in advance for giving this some thought.

Christopher Michaels

Comments

  • markd
    markd mod
    If you are OK with a 200 ema instead of sma, you can use PPO, which is the per cent version of MACD. MACD is the difference between two emas. Usually, it is plotted with a signal line, but for your purposes, it's not necessary. So this is what you would put on a daily chart:

    PPO(1, 200, 1)

    the first 1 is a one day ema of closes - that's not exactly the close of each day, but close.

    200 is a two hundred day ema of closes; not identical with the 200 sma, but, since this is about identifying a wide area of overboughtness, and not a price signal, it may be OK.

    The second 1 is the ema of the difference between the 1 ema and the 200 ema. Normally, this number would be 9.

    The scale on the right is in per cents, so you can just add a horizontal line to the indicator at 10 to see th periods where the 1 ema exceeded the 200 ema by more than 10 %.

    https://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=10&mn=0&dy=0&id=p94356788502

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