{"product_id":"stcov301sezo","title":"Stocks \u0026 Commodities V. 30:5 (12-17): Sentiment Zone Oscillator by Walid Khalil, MFTA, CFTe","description":"Sentiment Zone Oscillator by Walid Khalil, MFTA, CFTe\u003cbr\u003e\u003cbr\u003eHeres an indicator that measures extreme bullishness and bearishness and helps you identify a change in sentiment.\u003cbr\u003e\u003cbr\u003e\nAfter developing the volume zone oscillator (VZO) and price zone oscillator (PZO), I found there were sides of the market not covered by those two oscillators namely, time and sentiment. Sometimes, the market could reverse from a point with attractive price and volume indicators, but by then the sentiment could be be too high for the move to continue.\u003cbr\u003e\u003cbr\u003eThe psychology of that extreme sentiment point is best described in John Murphys Technical Analysis Of The Financial Markets, where he states that the more bullish the forecast, the more aggressively the trader will approach the market.\u003cbr\u003e\u003cbr\u003eSENTIMENT ZONE OSCILLATOR\u003cbr\u003e\u003cbr\u003eThe sentiment zone oscillator (SZO) is a leading contrary oscillator that measures the extreme emotions of a single market or share. It measures and defines both extremes, bullishness (overoptimism) and bearishness (overpessimism), that could lead to a change in sentiment, eventually changing the trend of the time frame under study.\u003cbr\u003e\u003cbr\u003eThe SZO was devised on the belief that after several waves of rising prices, investors begin to get bullish on the stock with increasing confidence since the price has been rising for some time. The SZO measures that bullishness\/bearishness and marks overbought\/oversold levels.\u003cbr\u003e\u003cbr\u003eCALCULATING IT\u003cbr\u003e\u003cbr\u003eThe SZO formula is based on the number of rising days to declining ones. It only uses the closing price as a separation rule.\u003cbr\u003e\u003cbr\u003eTo include both time and sentiment, a value of +1 is stored for each higher close above the previous period closes. Otherwise, a value of ‑1 is stored. With that calculation method, the time is covered and categorized bullish or bearish. In addition, a positive or a negative value serves the sentiment condition.\u003cbr\u003e\u003cbr\u003eFor smoothing purposes, a triple exponential moving average (TEMA) of those plus and minus values is divided by the total number of days of the period being studied:\u003cbr\u003e\u003cbr\u003eSentiment zone oscillator = 100 * (SP Range)\u003cbr\u003e\u003cbr\u003ewhere:\u003cbr\u003e\u003cbr\u003eSP (sentiment position) = X-days TEMA (number of up days minus number of down days)\nRange = Period being studied\u003cbr\u003e\u003cbr\u003eThe AmiBroker and MetaStock formulas for calculating the SZO are shown in the sidebar Calculating SZO.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133907136881,"sku":"300KHALPDF","price":3.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_b8ba7589-b0f7-436a-a0f9-f0a51e7a25d4.jpg?v=1739656437","url":"https:\/\/shop.traders.com\/products\/stcov301sezo","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}