QuanTAlib/lib/momentum/cmo/Cmo.md

CMO (Chande Momentum Oscillator)

The Chande Momentum Oscillator (CMO) is a momentum indicator developed by Tushar Chande. Unlike RSI which uses smoothed averages of gains and losses, CMO uses raw sums of up and down movements, making it more responsive to price changes. The indicator oscillates between -100 and +100.

Formula

CMO = 100 \times \frac{SumUp - SumDown}{SumUp + SumDown}

Where:

• SumUp = Sum of positive price changes over the period
• SumDown = Sum of absolute negative price changes over the period

Key Characteristics

Property	Value
Output Range	-100 to +100
Zero Line	Neutral momentum
Overbought	Above +50
Oversold	Below -50
Default Period	14

Comparison with RSI

Feature	CMO	RSI
Range	[-100, +100]	[0, 100]
Smoothing	None (raw sums)	RMA (exponential)
Sensitivity	Higher	Lower
Zero crossing	Valid signal	N/A (50 is neutral)

Usage

// Create CMO indicator
var cmo = new Cmo(period: 14);

// Single value update
var result = cmo.Update(new TValue(time, price));

// Batch calculation
var results = Cmo.Batch(priceData, period: 14);

// Subscribe to source
var cmo = new Cmo(sourceIndicator, period: 14);

Interpretation

1. Overbought/Oversold

   • CMO > +50: Overbought conditions
   • CMO < -50: Oversold conditions
   • Extreme readings (±70) suggest stronger signals

2. Zero Line Crossings

   • Crossing above zero: Bullish momentum
   • Crossing below zero: Bearish momentum

3. Divergences

   • Price makes new high, CMO doesn't: Bearish divergence
   • Price makes new low, CMO doesn't: Bullish divergence

4. Signal Line

   • Some traders use a 9-period EMA of CMO as a signal line

Implementation Details

• O(1) streaming updates using circular buffers
• SIMD-optimized batch calculations
• Zero heap allocations in hot paths
• Handles NaN and edge cases gracefully

Sources

• Chande, Tushar S. "The New Technical Trader" (1994)
• Chande, Tushar S. & Kroll, Stanley. "Beyond Technical Analysis" (1997)
• StockCharts - CMO