V.7:9 (282-285): Demand Oscillator momentum by Thomas Aspray

V.7:9 (282-285): Demand Oscillator momentum by Thomas Aspray
Item# \V07\C09\DEMANDO.PDF
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Demand Oscillator momentum by Thomas Aspray

The Demand Index developed by James Sibbett and its counterpart, the Demand Oscillator, are quite useful in identifying accumulation or distribution in both stocks and commodities. (See "Fine-tuning the Demand Index," Stocks & Commodities, June 1986.)

The Demand Index is a combination of price and volume, calculated as buying pressure (BP) and selling pressure (SP). I feel the Demand Oscillator makes signals from the Demand Index easier to interpret and identifies false index signals. To plot the Demand Oscillator, first calculate Buying Pressure (BP) and Selling Pressure (SP):


Though the Demand Oscillator generally gives good clean signals, it often lags somewhat, especially on weekly data, where it often generates signals which stay in force four to six months. Though it is quite good on the buy side, it is often late on the sell side.

To help offset this, I developed the Demand Oscillator Momentum (DOM) and found, preliminarily, that the 5- and 10-period mometums seem to work the best. As with most indicators I use, DOM gives signals in several ways:


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