Analysis of Nifty with Step Sum

Introduction :

Step Sum is in the form of a new technical tool to evaluate the psychology of the market. It has been developed by Mark Lundeen and it offers a unique insight into the psychology of the market. The step sum is simply a running total of up vs. down  days and it reflects trader psychology.

“15 Count” is  running sum of the daily step used in constructing their step sum over consecutive 15 days.

Now I am trying to measure the "Quality aspect" of Step sum with a simple logic & mathematics ; simply stated here is a plan to quantify the sum of all 'Count of 15' over a period of calendar year. First refer to the Table :

Table is based on OHLC data sourced from NSE site. Step sum were calculated on daily basis, thereafter 'Count of 15' were generated by excel (by adding step up or step down days over 15 days). September 2016 data is as on Thursday 22nd Sept 2016.

Note there had been 5 cases of 'no change' in closing Nifty , resulting in 0 change in Step Sum; consequently 'Count of 15' were rendered even numbers ; such cases were added to nearest odd number (E.g., 2 were counted with 1, 4 with 3, etc)

Z (Sigma) = Net weighted Count_15 for the Year =

 Summation over the year of  [ (Number of count) X (Value of Cnt) ]  for full range of  available Cnt  { from 15 to minus 15 }

For convenience a Template for Calculation was made in excel :

Data for September 2016 were used  (as for example in above)  as in-put taking net number for Cnt 13, .... , Cnt 1 & resulting sum was divided by 15 .

Explanation : Cnt 13 means 14 Up & 1 Down, hence, its numeric value is 14/15 ; Cnt 1 means 8 Up & 7 Down,hence, its numeric value is 8/15 etc etc.

Let us share a chart of Nifty closing with Step Sum :

Incremental Step Sum is a function of  Net_Wt_C-15.

I had used the Cnt_Calculator for classic 2004-08 rise in Nifty . Here is the result :