Updated on March 1, 2023
It is a technical analysis indicator that is used to measure the level of bullish and bearish speculation in the market. This indicator is based on the relative strength of increasing versus decreasing stocks. It is calculated by taking the ratio of the number of increasing stocks to the number of decreasing stocks on a stock exchange.
How to interpret the speculation index?
A high Speculation Index reading indicates a high level of bullish speculation in the market, as well as the optimistic approach of the investors about future market trends. A low reading of the speculation index indicates a high level of bearish speculation and a pessimistic approach of the investors about future market trends.
Can Speculation Index be used as a primary indicator?
The Speculation Index can be used as a secondary indicator to understand the market sentiment and potential market trends. In combination with other technical analysis tools, including price and volume analysis, the speculation index can provide a more complete understanding of market trends and potential trade signals.