Roman

http://www.charthub.com/images/2009/03/25/Diverg_MACD_Ergod 1. Three lines on price pane show price trending down. Some people may dispute the exact placement of those lines, but the fact remains: price declines. 2. The corresponding MACD lows are trending up. May suggest price reversal but not quite. The first declining price trend line is accompanied by a decisive rise in corresponding MACD trend but initially, at least , prices continue to fall. Only the second signal (Dec 8) is followed by price increase. 3. The forth pane shows CI kindly supplied by Chad some time ago -- ergodic signal. The false signal created by MACD -- Price divergence is absent here. The 4 bottom panes are CIs (code provided above by Chad, called "amplified divergence") . First out of 4 cranks MACD over an arbitrary period of 10 bars. Second cranks Ergodic over a period of 10 bars. Third cranks Ergodic over a period of 20 bars. Forth cranks MACD over a period of 20 bars. First thing that comes to mind is that the user should be able to adjust the period (number of bars) for analysis. Second: leave the choice of an indicator to the user. You can slide the dates backward looking at "MACD amplified divergence 20 bars" and spoting former occurrences. The false signal created by "raw" MACD is eliminated. Third: it allows to quantify the divergence !