Chaikin Money Flow (CMF)
The Chaikin Money Flow (CMF) indicator is derived from A/D. Developed by Marc Chaikin, breakouts may be forecast in advance of the price move. This is an indicator that reflects overbought or oversold conditions based on volume accumulation.
CMF establishes an index based on a zero middle line and movement above or below to a maximum of 1.0 or –1.0. If the CMF index moves above 0.20 on the upside, it indicates overbought conditions; or, if the index moves below –0.20 on the downside, it produces an oversold condition. However, unlike the analysis of price alone to develop these signals, CMF fails to adjust its indicator for gaps. As a consequence, a large gap is likely to distort results and lead to the wrong conclusions. ...
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