Average Sentiment Oscillator Bull and Bear Pressure Modes

Summary

The Average Sentiment Oscillator (ASO) is presented as an indicator of general market climate. It smooths separate bull and bear pressure values using a configurable moving average, with user-selected range and smoothing periods and smoothing method.

The calculation offers three modes. Intra-bar mode uses values derived from the current candle’s open, high, low, and close. Group algorithm mode applies the same structure to range-period extrema and opening values. Combined mode averages the intra-bar and group values before smoothing. The document provides formulas for these calculations, but no chart examples, performance tests, or trading rules that translate oscillator readings into entries or exits. Its usefulness is therefore as a description of indicator construction; it does not establish that the measure predicts market direction or improves trading results. The range formulas also depend on high-low spans, so the document does not explain handling bars or ranges where that span is zero.

Key ideas

• ASO smooths separate estimates of bullish and bearish pressure.
• The indicator exposes range length, smoothing length, smoothing method, and calculation mode as settings.
• Intra-bar mode derives pressure values from a single candle’s OHLC values.
• Group algorithm mode calculates pressure values from extrema over a selected range period.
• Combined mode averages the intra-bar and group values before applying smoothing.

Tags

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