TIGERSOFT and the Commodity Channel Index (CCI) Indicator
(c) 2013 www.tigersoft.com All rights strictly reserve
--------------------------------------------------------
The CCI was created by Donald Lambert.in 1976. Its formula is
shown and explained elsewhere on the internet. Its primary use
is to show extreme overbought and oversold conditons. As with the
Stochastic and RSI Indicators, it is not advisable to use the CCI
when momentum is extremely strong, as in bear market of 2008 or
the new bull market of 2009. In more normal markets, we can trade profitably
CCI NCs after the CCI first registers oversold by falling below -175
or overbought readings above +175. This is especially true of Index options
on the OEX and SP-500. In the examples below, you can see that
readings of the CCI above +200 and below -200 often work, but I
think you will find that subsequent CCI NCs work better.
I wrote a short study on this subject for the period 1980-2006. It is
available for $38.50 from TigerSoft. Below you can see how this strategy has worked
in the years since 2006.with the OEX, the SP-100. I do not show here how
the Peerless signals should be factored in. Suffice it to say, price breakouts and
breakdowns often suggest the momentum is too strong to take the
CCI NCs of new highs or lows as Buys or Sells, respectively.
2007 OEX and CCI NC Trades
.
