Chande Momentum Oscillator (CMO)

The Chande momentum oscillator, from Tushar Chande, looks like an unsmoothed RSI pushed onto a -100 to +100 scale. It sums the actual price changes rather than using Wilder's recursive average. The result swings harder than RSI. Zero is the balance of up changes and down changes. +50 is a common strong-up reading in his work, not a law.

Because there is no Wilder memory, a large bar ages out of the window in one step and CMO jumps. That jump is a window effect. Read the bar that entered and the bar that left before you treat the jump as new information. CMO is also used as the adaptive piece inside other Chande tools. Here it is the oscillator itself.

A turn up from a deeply negative reading, with price stabilizing, is the bullish use. A cross above zero is the coarser momentum shift. In a trend, staying positive is the regime.

A turn down from a high positive reading is the bearish use in a range. A cross below zero is the momentum shift the other way. Do not fade a reading of +50 in a market that is trending. Hard swings are the design.

Applying RSI's 30 and 70, rescaled, as if they had been researched for CMO. The scales and the smoothing differ. Also smoothing CMO until it becomes a worse RSI and then trading both.

Sensitivity means noise. If you cannot tolerate the jumps when a bar leaves the window, use RSI. CMO's advantage is only the lack of smoothing, which you may not want.