The CCI is designed to detect beginning and ending market trends. The range of 100
to -100 is the normal trading range. CCI values outside of this range indicate overbought
or oversold conditions. You can also look for price divergence in the CCI. If the
price is making new highs, and the CCI is not, then a price correction is likely.
The Commodity Channel Index was developed by Donald Lambert and is described in
his article in the October 1980 issue of Commodities magazine (now called Futures).
Formula:
