Herrick Payoff Index


Function Name: hpi

Tags: HPI, Open Interest

Category: Volume

The HPI (Herrick Payoff Index) measures the money flow of an underlying asset or option as well as significant divergences between the price activity and the indicator, determining whether a market is bullish or bearish. Positive values are generally bullish indications as there is increasing interest in the market. Negative values are generally bearish indications as there is decreasing interest in the market. HPI examines open interest in relation to price activity and volume. Since the HPI indicator uses open interest as a key element in its calculations, it can only be used in conjunction with daily futures or options data. Mult is the contract value of a 1 cent move in the underlying asset.

When HPI crosses above zero this shows that interest in the market is growing. This is regarded as a positive sign (bullish). On the other hand, readings below zero can be interpreted as a negative sign (bearish).

Another important occurrence in the Index is when it moves to an extreme, then reverses quite sharply. This indicates that the price reached a short-term buying or selling climax.

The Index often shows whether a rally signaled by other short term indicators will turn out to be worthwhile or not.


Author: John Herrick, Steven B. Achelis

Source: "Technical Analysis From A To Z"

Link:       http://www.investopedia.com/articles/trading/03/011703.asp





Default Value: 100  |  Minimum: 1  |  Maximum: 9999


Type: Numeric



Default Value: 0.1  |  Minimum: 0  |  Maximum: 1


Type: Numeric