The Simple Harmonic Index as a Zero-Crossing Time-Cycle Oscillator

Summary

The Simple Harmonic Index (SHI) is presented as a time cycle oscillator, with bullish signals when it crosses above zero and bearish signals when it crosses below zero. Its calculation starts with the change in closing price from the previous bar, then measures the change in that price movement. The latter quantity is smoothed with a configurable moving average. The square root of the absolute ratio between price change and smoothed acceleration is assigned a positive or negative sign according to whether the close rose or fell. A moving average of these signed values forms SHI.

The page attributes the indicator to a 2018 journal article and provides an implementation with a bounded smoothing period. It offers the signal interpretation and formula, but no chart examples, market selection, parameter study, or performance evidence. The zero crossings should therefore be treated as an indicator definition rather than proof of a profitable timing strategy; the page does not discuss transaction costs, whipsaws, or risk controls.

Key ideas

• SHI signals bullish conditions on a cross above zero and bearish conditions on a cross below zero.
• The calculation uses price changes, changes in those movements, and a smoothed acceleration term.
• Signed square root values are smoothed to produce the oscillator.
• The page provides no tests or evidence that zero-crossing signals are profitable.

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