The Composite Market Direction Indicator is used to determine the maturity of the current trend, probable direction, and proximity to extremes and turning points. It is an oscillator, ranging from +1 to -1. The formula for the MDI is as follows:

(H-L)/(H+L)Where H is equal to the sum of the number of stocks making new 52 week highs in the American, NYSE and NASDAQ exchanges, and L is equal to the sum of the number of stocks making new 52 week lows in the American, NYSE and NASDAQ exchanges. The chart is updated once per week using closing data for the last trading day of the week, usually Friday.