Step Sum is 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.
The step sum is a single item Advance – Decline Line. In other words; if Nifty is down from the previous day’s close, we give it a value of (-1), if they end the day up from the previous day’s close, we give it a value of (+1). So a step sum plot is merely the net sum of up and down market days over time.
Let me build up the algebra for evaluating the step sum ; X is number of UP days (simply referred herein after as UP) and Y is the number of DOWN days (simply referred herein after as DOWN) and the STEP Sum is equal to [ X – Y] Accordingly, the following narrates the Table :
1). Step sum is 0 (Zero) when Nifty was 1000 , on the starting Day of OHLC value (02 Nov 1995);
2). On 273th Day (04 Dec 1996) , the step sum reached a value of minus 35 as a result of 119 UP & 154 DOWN (as per DATA in the Table) & Nifty closed at 788 with Nifty reaching a Significant Low (775) ; a key observation lowest step sum from my studies of 6700 days of the NIFTY Index ;
3). On 1073th Day (23 Feb 2000) the step sum turns Positive at 3 as a result of 538 UP & 535 DOWN & Nifty closed at 1696.40 with Nifty reaching a Significant High (1818)
3) On 1,314 th Day (09 Feb 2001), the step sum reached a value of 24 as a result of 669 UP & 645 DOWN & Nifty closed at 1406 with Nifty reaching a Significant High (1416) ; a key observation Highest step sum from my studies of the initial 2561 days of the NIFTY Index
4) On 1468 th Day (21 Sep 2001) , the step sum reached a value of minus 2 as a result of 733 UP & 735 DOWN & Nifty closed at 854 with Nifty reaching a Significant Low (850) ;
5) Subsequently the step sum hovers around a low value reaching minus 4 and on two occasions reached a ZERO value , viz., 1690th Day when UP days = DOWN days (840) and again on 1742th days (30 Oct 2002) when UP-days = DOWN-days (871) ;
6) Thereafter, the step sum kept growing steadily reaching 228 when the Nifty reaching Significant High (6357) on the 3046th Day (08 JAN 2008) with 1637 UP & 1409 DOWN and Nifty closing at 6288 ;
7) On 3116th Day (22 Apr 2008) the step sum reaching high of 234 with 1675 UP & 1441 DOWN and Nifty closing at 5049 ; a key observation higher Step Sum topped out with out a higher value in Nifty but starting a correction ;
8) On 3244th day (27 Oct 2008) the step sum went down to 214 as a result of 1729 UP & 1545 DOWN & Nifty closing at 2524 with Significant Low (2253) ;
9) On 3302nd day (23 Jan 2009), the step sum went down to 212 with 1757 UP & 1545 DOWN & Nifty closing at 2679 ;
10) On 3743th day (05 Nov 2010) the step sum went up to 265 following 2004 UP & 1739 DOWN & Nifty closing at 6312 while the Significant High 6338 reached ;
11) On 4020th day (20 Dec 2011) the step sum went down to 230 following 2125 UP & 1895 DOWN & Nifty closing at 4544 with the Significant Low 4531 reached ;
12) On 4818th Day (04 Mar 2015) the step sum went up to 314 following 2566 UP & 2252 DOWN & Nifty closing at 8923 while the Significant High 9119 reached ;
13) On 5063rd Day (29 Feb 2016) the step sum went down to 289 following 2676 UP & 2387 DOWN & Nifty closing at 6987 with the Significant Low 6826 reached
14) On 6019th Day (20 Jan 2020) the step sum went up to 379 following 3199 UP & 2818 DOWN & Nifty closing at 12225 while the Significant High 12430 reached ;
13) On 6064th Day (24 Mar 2020) the step sum went down to 366 following 3215 UP & 2849 DOWN & Nifty closing at 7801 with the Significant Low 7511 reached ;
14) On 6454th Day (19 Oct 2021) the step sum went up to 458 following 3456 UP & 2998 DOWN & Nifty closing at 18419 while the Significant High 18604 reached ;
15) On 6619 th Day (17 Jun 2022) the step sum went down to 429 following 3524 UP & 3095 DOWN & Nifty closing at 15293 with the Significant Low 15183 reached ; and
16) On 6700th Day (14 Oct 2022) the step sum went up to 440 following 3570 UP & 3130 DOWN and the Nifty closing at 17186.
Derived Conclusive Points : The Step Sum is ALWAYS a function of closing value of the INDEX irrespective of the Nifty High or Low value. However, the Significant Low/High in the Step Sum are co-related with the Nifty High or Low value (often around historically significant values).
TABLE (with all DATA)
| Date | N I F T Y | Step UP | Step DOWN | |||||
| High | Low | Close | StepSum | Index | No_UP | Index | N0_DOWN | |
| 1000 | 0 | |||||||
| 04-Dec-96 | 806 | 775 | 788 | -35 | 1434 | 119 | 1646 | -154 |
| 23-Feb-00 | 1818 | 1689 | 1696 | 3 | 7748 | 538 | 7051 | -535 |
| 09-Feb-01 | 1416 | 1396 | 1406 | 24 | 10019 | 669 | 9614 | -645 |
| 21-Sep-01 | 904 | 850 | 854 | -2 | 10831 | 733 | 10977 | -735 |
| 02-Aug-02 | 958 | 936 | 955 | -4 | 11950 | 840 | 11995 | -844 |
| 12-Aug-02 | 972 | 961 | 970 | 0 | 11981 | 845 | 12011 | -845 |
| 30-Oct-02 | 944 | 936 | 938 | 0 | 12128 | 871 | 12190 | -871 |
| 02-Dec-04 | 2002 | 1963 | 1999 | 100 | 16873 | 1185 | 15874 | -1085 |
| 31-Jan-06 | 3005 | 2969 | 3001 | 137 | 20260 | 1349 | 18259 | -1212 |
| 04-Dec-06 | 4015 | 3992 | 4001 | 187 | 24904 | 1480 | 21903 | -1293 |
| 27-Sep-07 | 5016 | 4943 | 5001 | 222 | 29823 | 1599 | 25822 | -1377 |
| 11-Dec-07 | 6111 | 5960 | 6097 | 222 | 32569 | 1625 | 27472 | -1403 |
| 08-Jan-08 | 6357 | 6222 | 6288 | 228 | 33179 | 1637 | 27891 | -1409 |
| 22-Apr-08 | 5074 | 4994 | 5049 | 234 | 36190 | 1675 | 32141 | -1441 |
| 27-Oct-08 | 2585 | 2253 | 2524 | 214 | 40162 | 1729 | 38637 | -1515 |
| 23-Jan-09 | 2766 | 2662 | 2679 | 212 | 42373 | 1757 | 40695 | -1545 |
| 05-Nov-10 | 6339 | 6303 | 6312 | 265 | 55232 | 2004 | 49919 | -1739 |
| 20-Dec-11 | 4637 | 4531 | 4544 | 230 | 62082 | 2125 | 58538 | -1895 |
| 30-Dec-11 | 4690 | 4609 | 4624 | 228 | 62337 | 2128 | 58713 | -1900 |
| 03-Mar-15 | 9008 | 8926 | 8996 | 315 | 82369 | 2566 | 74373 | -2251 |
| 04-Mar-15 | 9119 | 8894 | 8923 | 314 | 82369 | 2566 | 74447 | -2252 |
| 11-Feb-16 | 7209 | 6960 | 6976 | 287 | 88853 | 2669 | 82877 | -2382 |
| 29-Feb-16 | 7095 | 6826 | 6987 | 289 | 89285 | 2676 | 83298 | -2387 |
| 16-Jan-20 | 12389 | 12316 | 12356 | 381 | 120312 | 3199 | 108957 | -2818 |
| 20-Jan-20 | 12431 | 12217 | 12225 | 379 | 120312 | 3199 | 109088 | -2820 |
| 23-Mar-20 | 8159 | 7584 | 7610 | 365 | 122349 | 3214 | 115739 | -2849 |
| 24-Mar-20 | 8037 | 7511 | 7801 | 366 | 122540 | 3215 | 115739 | -2849 |
| 18-Oct-21 | 18543 | 18445 | 18477 | 459 | 149708 | 3456 | 132231 | -2997 |
| 19-Oct-21 | 18604 | 18378 | 18419 | 458 | 149708 | 3456 | 132289 | -2998 |
| 17-Jun-22 | 15400 | 15183 | 15294 | 429 | 161706 | 3524 | 147413 | -3095 |
| 14-Oct-22 | 17349 | 17170 | 17186 | 440 | 167728 | 3570 | 151542 | -3130 |
