Mass index
Tracks the widening and narrowing of the high-low trading range to flag potential reversals — a “reversal bulge” appears when the range expands sharply, then contracts.
What the numbers mean
Nine is the EMA period applied to the high-low range, 25 is how many of those smoothed ratios get summed. The conventional reading is the reversal bulge: the index rising above 27 and then falling back below 26.5.
- 9 — the EMA period applied to the high-low range
- 25 — how many smoothed ratios are summed into the index
- 27 — the level the index must exceed to set up a reversal bulge
- 26.5 — the level it must then fall back below to complete the signal
How it is used
Used to anticipate reversals without reference to direction — the bulge says the range has expanded and then contracted sharply, which often accompanies a turn. Direction is then taken from a moving average or the prevailing trend.
- Rise above 27 then fall below 26.5 → the reversal bulge; a turn is likely
- Direction comes from elsewhere — the index is silent on which way
- Most useful after an extended move, where a reversal has something to reverse
How it relates to everything else
The Mass Index detects range expansion followed by contraction, which is a different question from the one ATR or Bollinger width answer — those measure the level of volatility, this measures a specific shape in it. Because it gives no direction, it is nearly always paired with a moving average or the prevailing trend to decide which way to lean.
- Bulge + 9-period EMA slope → the conventional way to add direction
- Related to Bollinger squeeze logic, but looking for expansion then contraction rather than compression
- False bulges cluster around earnings and one-off news volatility
What to watch for
It flags only that something is likely to change, not what. False bulges are common around earnings and other one-off volatility events.