Category: Advanced Indicator Set 2

Input parameters

Calculations

The Center of Gravity Index (CGI) is calculated in almost the same manner as Center of Gravity Oscillator (CG), except its output represents percent change of the center of gravity position within the window relative to the window’s middle point:

CGI = 100*(2*(1-(CG/(Period + 1)))-1)

Discussion

The CGI ranges from -100% to +100% and does not depend upon the window size as the original CG does. The middle point is 0% (sideways market), rising markets have positive CGI values from 0% to 100%, and falling markets have negative CGI values from 0% to -100%. Most stock market price time series exhibit CGI values within +5% to -5% or an even smaller range.

Reference

The Center of Gravity Index is our modification of the original: John F. Ehlers, “The Center Of Gravity Oscillator”, Technical Analysis of Stocks & Commodities, May 2002, pp.20-24