A Polynomial Center of Gravity with MACD Deviation Bands

Summary

This indicator combines the conventional MACD and signal line with a polynomially fitted center of gravity. The center is calculated from historical values of the midpoint between MACD and its signal line, while standard-deviation bands measure how far those values depart from the fitted curve. Additional inner bands scale the deviation using a Fibonacci factor. The described settings let users adjust the moving-average periods, polynomial degree, history window, and band widths.

The document interprets MACD above or below the center as bullish or bearish direction, and crossings as possible early signs of a change. It treats the outer bands as potential overbought or oversold zones and the histogram as a momentum cue. No empirical performance tests or comparison with simpler indicators are provided. The polynomial fit, bands, and moving averages depend on parameter choices and can lag price action, so the signals are descriptive heuristics rather than validated entry or exit rules.

Key ideas

• The indicator fits a polynomial center line to the midpoint of MACD and its signal line over a configurable history window.
• Standard-deviation bands track departures from the fitted center, with additional bands scaled by a Fibonacci factor.
• MACD position and crossings relative to the center are presented as trend and possible turning-point cues.
• The bands are interpreted as potential overbought or oversold areas, not guaranteed reversal levels.
• The document supplies no performance validation and notes parameter sensitivity and lag as limitations.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.