Interpretation

Mr. Wilder said, "Somewhere amidst the maze of Open, High, Low and Close prices is a phantom line that is the real market." The Accumulation Swing Index attempts to show this phantom line. Since the Accumulation Swing Index attempts to show the "real market," it closely resembles prices themselves. This allows you to use classic support/resistance analysis on the Index itself. Typical analysis involves looking for breakouts, new highs and lows, and divergences.

Wilder notes the following characteristics of the Accumulation Swing Index:

• It provides a numerical value that quantifies price swings.

• It defines short-term swing points.

• It cuts through the maze of high, low, and close prices and indicates the real strength and direction of the market.