The CD is a sensitive, second derivative acceleration indicator, the derivative of the PeakOscillator. It is calculated in the same way as the MACD histogram from a moving average oscillator. It is the difference between the PeakOscillator and the average of the PeakOscillator, where the MACD is the difference between an exponential moving average oscillator and its average. When used in conjunction with the Kase PeakOscillator this signal indicates the market's direction.
However, because its basis is statistical, it generates cleaner crossover signals and more reliable divergences.
Interpretation: The KaseCD is used as a confirming divergence indicator. Its use is primarily to confirm, as it is more sensitive than the PeakOscillator, and will generate divergences for minor turns and corrections.
For further information, see Danger Signals in Trading Guidelines.
CD Parameters
•Display
•MarkIt
•Range: Starting and ending points for the calculation window.