Nasdaq Pressure Index

Nasdaq Pressure Index Indicator
The Nasdaq Pressure Index is a customizable technical indicator designed to measure market sentiment across multiple symbols by calculating a weighted average of their technical strength. The indicator outputs a normalized value between -100 and +100, making it easy to identify bullish or bearish pressure in your selected basket of stocks.

Description
This indicator calculates the relative strength of up to 10 user-defined symbols, typically tech stocks or other related instruments, and combines them into a single pressure index. The result provides insight into the overall market direction and strength.

Key Features
Multi-Symbol Analysis: Track up to 10 different symbols simultaneously
Flexible Weighting Methods:
Manual Market Caps: Define your own market cap weights
30-Day Volume: Weight by recent trading volume
Equal Weight: All symbols contribute equally
Customizable Parameters: Adjust EMA lengths and smoothing to suit your trading style
Visual Cues: Color-coded output and background highlighting for extreme values
Debug Information: Option to display detailed calculations
How It Works

The indicator:

Calculates the strength of each symbol based on:
Price relative to VWAP (50% weight)
Price relative to Fast EMA (30% weight)
Price relative to Slow EMA (20% weight)
Normalizes these values using ATR to account for volatility
Applies your chosen weighting method
Combines the weighted values into a single index
Normalizes the result to a -100 to +100 scale using a hyperbolic tangent function
Applies final smoothing

How To Use It
Setup:

Enter your symbols as a comma-separated list (default includes major tech stocks)
Choose your preferred weighting method
If using manual weights, enter market caps in billions (comma-separated)
Adjust EMA lengths if needed (defaults: Fast EMA = 9, Slow EMA = 21)
Interpretation:

Positive Values (0 to +100): Bullish pressure - the higher the number, the stronger the bullish sentiment
Negative Values (0 to -100): Bearish pressure - the lower the number, the stronger the bearish sentiment
Extreme Zones: Values above +50 or below -50 indicate potentially overbought or oversold conditions
Color Changes: Green for positive (darker when increasing), Red for negative (darker when decreasing)

This is primarily a confluence indicator:

Consider taking long positions only on positive values of the indicator
Consider taking short positions only on negative values of the indicator
Look for divergence between the index and price for potential reversals
Extreme readings (+/-50) can signal potential market exhaustion


Optimization:

Try different symbol combinations to create sector-specific indicators
Experiment with different weighting methods to find what works best for your trading style
Adjust the EMA lengths to make the indicator more or less sensitive to price changes
The indicator works on any timeframe but is particularly useful on daily and weekly charts for capturing broader market movements.