The Mass Index is used to warn of a future price reversal. The theory behind the Mass Index is that reversals occur when the price range [high – low] increases (i.e. more volatility).
The chart below of the E-mini S&P 500 future shows the Mass Index warning of an impending price reversal:
The components for a Mass Index reversal of trend, “Reversal Bulge" as the creator of the Mass Index, Donald Dorsey refers to it, are listed below:
The Mass Index is presented as a useful technical tool that traders might use to time entry into bottoming markets.
Sourced from OnlineTradingConcepts.com All copyrights belong to their respective owners.