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Overview
The Accumulation Swing Index is a cumulative total of the
Swing Index. The Accumulation Swing Index was developed by
Welles Wilder.
Interpretation
Mr. Wilder said, "Somewhere amidst the maze of Open, High, Low and Close prices is a
phantom line that is the real market." The Accumulation Swing Index attempts to show this
phantom line. Since the Accumulation Swing Index attempts to show the "real market," it
closely resembles prices themselves. This allows you to use classic support/resistance
analysis on the Index itself. Typical analysis involves looking for breakouts, new highs
and lows, and divergences.
Wilder notes the following characteristics of the
Accumulation Swing Index:
It provides a numerical value that quantifies price swings.
It defines short-term swing points.
It cuts through the maze of high, low, and close prices and indicates the real strength
and direction of the market.
Example
The following chart shows Corn and
its Accumulation Swing Index.
You can see that the breakouts of the price trendlines
labeled "A" and "B" was confirmed by breakouts of the Accumulation Swing Index trendlines
labeled "A'" and "B'."
Calculation
The Accumulation Swing Index is a cumulative total of the
Swing Index. The Swing Index and the Accumulation Swing Index
require opening prices.
Step-by-step instructions on calculating the Swing Index are provided in Wilder's book,
New Concepts In Technical Trading Systems.
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