OPEN-SOURCE SCRIPT
Long-Term Capitulation Oscillator (LTCO, Diodato 2019)
Description:
This script is a faithful implementation of the Long-Term Capitulation Oscillator (LTCO) from Chris Diodato's award-winning 2019 CMT paper, "Making The Most Of Panic". It is a strategic, market-wide breadth and volume oscillator designed to identify major, long-term market bottoms.
What It Is
The LTCO combines long-term moving averages (34, 55, 89, 144, and 233-day) of NYSE advancing/declining issues and up/down volume. It uses a unique "average of averages" method to create a responsive yet strategic long-term indicator. This script plots the raw, un-normalized value as described in the paper, which typically oscillates in the 700-1100 range.
How to Interpret
The LTCO is a strategic tool for identifying potentially significant market turning points.
Extremely Low Readings: Suggest that a long-term period of selling has reached a point of exhaustion, potentially marking a major bear market low or a generational buying opportunity. The paper backtested various thresholds, with values below 950, 925, and especially 875 showing historically strong forward returns over the next 6-24 months.
Overbought/Oversold Lines: The script includes customizable overbought/oversold lines to help you visually identify these critical zones.
Settings
Data Sources: Allows toggling the use of "Unchanged" issues/volume data for the calculation.
Thresholds: You can set the overbought and oversold levels to your preference, based on the paper's findings or your own research.
This script is a faithful implementation of the Long-Term Capitulation Oscillator (LTCO) from Chris Diodato's award-winning 2019 CMT paper, "Making The Most Of Panic". It is a strategic, market-wide breadth and volume oscillator designed to identify major, long-term market bottoms.
What It Is
The LTCO combines long-term moving averages (34, 55, 89, 144, and 233-day) of NYSE advancing/declining issues and up/down volume. It uses a unique "average of averages" method to create a responsive yet strategic long-term indicator. This script plots the raw, un-normalized value as described in the paper, which typically oscillates in the 700-1100 range.
How to Interpret
The LTCO is a strategic tool for identifying potentially significant market turning points.
Extremely Low Readings: Suggest that a long-term period of selling has reached a point of exhaustion, potentially marking a major bear market low or a generational buying opportunity. The paper backtested various thresholds, with values below 950, 925, and especially 875 showing historically strong forward returns over the next 6-24 months.
Overbought/Oversold Lines: The script includes customizable overbought/oversold lines to help you visually identify these critical zones.
Settings
Data Sources: Allows toggling the use of "Unchanged" issues/volume data for the calculation.
Thresholds: You can set the overbought and oversold levels to your preference, based on the paper's findings or your own research.
نص برمجي مفتوح المصدر
بروح TradingView الحقيقية، قام مبتكر هذا النص البرمجي بجعله مفتوح المصدر، بحيث يمكن للمتداولين مراجعة وظائفه والتحقق منها. شكرا للمؤلف! بينما يمكنك استخدامه مجانًا، تذكر أن إعادة نشر الكود يخضع لقواعد الموقع الخاصة بنا.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.
نص برمجي مفتوح المصدر
بروح TradingView الحقيقية، قام مبتكر هذا النص البرمجي بجعله مفتوح المصدر، بحيث يمكن للمتداولين مراجعة وظائفه والتحقق منها. شكرا للمؤلف! بينما يمكنك استخدامه مجانًا، تذكر أن إعادة نشر الكود يخضع لقواعد الموقع الخاصة بنا.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.