The Reversion Index
MT4 conversion: Banzai
Date: Dec. 13, 2025
from the TASC magazine (Technical Analysis of Stocks & Commodities), January, 2026
In John Ehlers’ article in this issue, “The Reversion Index,” he presents an indicator that produces timely buy and sell signals for mean-reversion strategies by summing bar-to-bar price changes and normalizing them by their absolute values. He explains that the summation should cover about half of the dominant cycle in the data, and that peaks and valleys are identified by the crossings of two SuperSmoother filters with different lengths. The reversion index is a normalized sum of price differences that oscillates between -1 and +1.
Watch the divergences too.
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