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MassIndex Indicator | Technical Indicators | BCI Futures

Description:

The MassIndex indicator focuses on the oscillation of the daily range. “The most important pattern in range oscillation analysis is the reversal bulge, a gradual but definite increase of the average daily range that indicates the market is near a turning point.” (Dorsey, page 67)

When Plot1 crosses above Plot2, the indicator is in a trigger state. If Plot1[1] crosses below Plot3[1], the indicator is removed from a trigger state.

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Conventional Analysis:

The MassIndex is used to warn of an impending direction change. Therefore, when a bulge occurs, take a position in the opposite direction.

Additional Analysis:

Additional Analysis is provided to identify the current trend (based on a 9-bar exponential moving average) which in turn identifies the trend reversal signal as either bullish or bearish. If the MassIndex has crossed above the Setup line, is falling, but has not quite crossed the Trigger line, the additional analysis lets you know how much further the index has to fall before a signal is generated.

Additional References:

Dorsey, Donald. The Mass Index. Technical Analysis of Stocks and Commodities. June ’92. Pages 67-69.

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