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I recall fielding a question about the Demand Index several months ago. I
found the following about this proprietary indicator. I hope it helps.
Demand Index
Format: DemandIndex(range)
Developed by James H. Sibbet, the Demand index is the ratio between up and
down volume and is thought to be particularly valuable due to the generally
leading nature of volume data.
In the Demand Index, the total volume for a given day is divided into two
portions according to the position of the close between the day's true high
- the higher of today's high and yesterday's low - and the true low - the
lower of today's low and yesterday's high. True high and true low eliminate
the problems of limit days and more appropriately apportion volume on gap
days.
The separate up volume and down volume are then smoothed exponentially. The
ratio of the smoothed numbers is arrived at by keeping the larger number -
whether it is the smoothed up volume or the smoothed down volume - as the
divisor. Thus, all results lie between 1 (up volume = down volume) and
zero. If you plot the Demand Index, a correction is made so that the data
will be plotted above or below a central line with the top of the plot at
+1 (large up volume and little or no down volume) and - 1 (large down
volume and little or no up volume).
Reference: James H. Sibbet, Sibbet Publications, 1091 East Woodbury,
Pasadena, CA 91104 (818-791-5157).
Sorry if this has been posted before....
rld
Richard Leighton Dixon
rldixon@xxxxxxxx
Disclaimer: Nobody agrees with me.
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