Tsunami Indicator

I came across this indicator on John Bollinger’s forum that might be of interest. Designed by Ian Woodard and Ron Brown, it measures a sharp move (in either direction) in the Bollinger %B. The %B is an indicator derived from the Bollinger Bands and it calculates the current price relative to the top and bottom Bollinger Bands [more info here].

The Tsunami indicator looks for a one-day change in %B of .40 or greater compared to yesterday’s %B. So, for example – if yesterday’s %B was .70 and today’s was .20, that means the %B dropped more than .40 and a Tsunami Down would trigger. If yesterday’s %B was .30 and today’s %B was .40, a Tsunami Up would not have triggered because the move was less than .40. A Tsunami Up typically means you can expect a nice price move higher in the days ahead, while a Tsunami Down usually means it’s time to batten down the hatches.

Here’s the formula to show the Tsunami Down signal for a 20 period Bollinger Band:

V1 = BPB(BARS=20);
(V1 - V1[1])<-0.4

And for Tsunami Up:

V1 = BPB(BARS=20);
(V1 - V1[1])>0.4

Use the SWITCH() function in a Show View to turn on when the Tsunami Up triggers, and turn off when the next Tsunami Down occurs.
The Show View can then be dragged over the price chart, as per the green shaded areas:

V1 = BPB(BARS=20);
TUp = (V1 - V1[1])<-0.4; 
TDn = (V1 - V1[1])>0.4;