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Recent News:
  • Fri, May 10 05:00 AM  Crude oil futures drop as dollar's strength grows:  The emboldened U.S. dollar pulled down West Texas Intermediate crude oil futures on Friday, as the world's reserve currency pushed to its top level in more than 14 days, according to Bloomberg.  Read more.    Fri, May 10 04:33 AM  Loonie dives after release of weak labor report:  The Canadian dollar on Friday dropped to its week-low against the U.S. dollar after the nation released underwhelming job-creation data, Bloomberg reports.  Read more.    Fri, May 10 02:17 AM  Aussie's losses increasingly causing concern:  Friday saw the Australian dollar dive toward parity with the world's reserve currency for the first time since the beginning of the second half of last year as concerns about Australia's economy were gaining momentum, according to Bloomberg.  Read more.    Fri, May 10 05:00 AM  Crude oil futures drop as dollar's strength grows:  The emboldened U.S. dollar pulled down West Texas Intermediate crude oil futures on Friday, as the world's reserve currency pushed to its top level in more than 14 days, according to Bloomberg.  Read more.    Fri, May 10 04:33 AM  Loonie dives after release of weak labor report:  The Canadian dollar on Friday dropped to its week-low against the U.S. dollar after the nation released underwhelming job-creation data, Bloomberg reports.  Read more.    Fri, May 10 02:17 AM  Aussie's losses increasingly causing concern:  Friday saw the Australian dollar dive toward parity with the world's reserve currency for the first time since the beginning of the second half of last year as concerns about Australia's economy were gaining momentum, according to Bloomberg.  Read more.    Fri, May 10 05:00 AM  Crude oil futures drop as dollar's strength grows:  The emboldened U.S. dollar pulled down West Texas Intermediate crude oil futures on Friday, as the world's reserve currency pushed to its top level in more than 14 days, according to Bloomberg.  Read more.    Fri, May 10 04:33 AM  Loonie dives after release of weak labor report:  The Canadian dollar on Friday dropped to its week-low against the U.S. dollar after the nation released underwhelming job-creation data, Bloomberg reports.  Read more.    Fri, May 10 02:17 AM  Aussie's losses increasingly causing concern:  Friday saw the Australian dollar dive toward parity with the world's reserve currency for the first time since the beginning of the second half of last year as concerns about Australia's economy were gaining momentum, according to Bloomberg.  Read more.   
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Commodity Futures Newsletter
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Futures Trader’s Guide to Technical Analysis

Futures Trader's Guide to Technical Analysis
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Commodity Channel Index

Interactive Chart Study List
Bollinger Bands Commodity Channel Index Crack Spread
Crush Spread Directional Movement Index Envelope
Exponential Moving Average Exponential Oscillator Highest High/Lowest Low
High/Low Moving Average Historic Volatility Keltner Channel
Least Squares Linear Regression Line Oscillator Momentum
Moving Average Moving Average Convergence / Divergence Moving Standard Deviation
Open Interest Oscillator Parabolic Stop and Reversal
Rate of Change Relative Strength Index Slow Stochastic
Smoothed Moving Average Smoothed Oscillator Stochastic
Variable Moving Average Volume Volume and Open Interest
Weighted Close Williams’ Percent R  

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Commodity Channel Index is designed to detect beginning and ending market trends.  This study measures the distance between the share prices and their Moving Average, and thus allows a measurement for the trend strength and/or intensity.

Properties

Period:  The number of bars in a chart.  If the chart displays daily data, then period denotes days; in weekly charts, the period will stand for weeks, and so on.  The application uses a default of 20, with 14 being another common setting.

Aspect:  The Symbol field on which the study will be calculated.  Field is set to “Default”, which, when viewing a chart for a specific symbol, is the same as “Close”.

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Interpretation

This index, as suggested by its name, was designed for the futures market but is today also used for shares.  According to the developer, Lambert, values of +100 to -100 point to a market with no trends, and thus do not supply any trade studies.  Also, according to Lambert, 70% to 80% or all price fluctuations fall within +100 and -100 as measured by the index.  Buying and selling signals only occur when the +100 line (buy) and the -100 (sell) are crossed.

The trading rules for the CCI are as follows:
  • Establish a long position when the CCI exceeds +100.
  • Liquidate when the index drops below +100.
  • For a short position, you use the -100 value as your reference point.  Any value less than -100, e.g.  125, suggests a short position, while a rise to -85 tells you to liquidate your short position.

Literature

Lambert, Donald R.  Commodity Channel Index, Commodities magazine.  October, 1980.

Colby, Robert F., Myers, Thomas A.  The Encyclopedia of Technical Market Indicators.  Dow Jones - Irwin.  Homewood, IL.  1988.

Lebeau, Charles, and Lucas, David.  Technical Trader’s Guide to Computer Analysis of the Futures Market.  Homewood, IL:  Business One Irwin, 1991.

Jobman, Darrel R.  The Handbook of Technical Analysis.  Irwin Professional Publishing.  1995.

Commoditiy Channel Index:  Tool for Trading Cyclic Trends.  Commodities.  October, 1980, pp.40.  (now Futures)

Murphy, John J.  Technical Analysis of the Futures Markes.

Wilder, J. Welles.  New Concepts in Technical Trading Systems.  Greensboro, NC:  Trend Research, 1978.

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