Momentum Composite Oscillator (MCO)

4 เม.ย.

Momentum Composite Oscillator (MCO)

The Momentum Composite Oscillator (MCO) is a multi-factor momentum indicator that combines several widely used momentum metrics into a single normalized oscillator.

The script integrates RSI, MACD momentum, and Rate of Change (ROC) into a weighted composite that is scaled to a 0–100 range. This approach allows different momentum signals to be viewed together in a unified framework.

Core Features

• Composite Momentum Line – Represents the combined momentum reading from multiple indicators
• Signal Line – A smoothed reference line used to highlight shifts in momentum
• Momentum Histogram – Displays the spread between the composite and signal lines
• Momentum Zones – Configurable upper, mid, and lower levels help visualize different momentum regimes
• Cross Markers: Bull cross: Blue Dots, Bear Cross: Orange Dots – Highlight early momentum shifts when the composite crosses the signal line
• Confirmation Markers – Optional follow-through markers that trigger when momentum confirms above or below upper or lower thresholds which may signal major momentum reversals. Bull Confirmation: Green triangles, Bear Confirmations: Red Triangles
• Adaptive Signal Option – Adjusts signal smoothing based on recent volatility

How It Works

The indicator combines three momentum components:

RSI – Measures the relative strength of price movements
MACD momentum – Captures changes in trend acceleration
Rate of Change (ROC) – Measures the speed of price movement

Each component is normalized using a rolling range so they operate on the same scale. Adjustable weights allow users to emphasize different momentum inputs depending on their analytical preference.

The resulting composite can optionally be smoothed to reduce short-term noise while maintaining responsiveness.

Basic Interpretation
When the composite moves above the midline, momentum conditions are generally strengthening.
When the composite moves below the midline, momentum conditions are generally weakening.
Crossovers between the composite and signal line can highlight changes in momentum direction.
The histogram reflects the distance between momentum and its signal, helping visualize acceleration or deceleration.
Customization

The indicator includes several adjustable settings:

Component weights for RSI, MACD, and ROC
Momentum zone levels
Composite smoothing
Adaptive or fixed signal modes
Signal confirmation settings
Visual display options for signals, histogram, and background regimes
Notes

This indicator is designed as a momentum analysis and visualization tool and can be applied to any market or timeframe.

Disclaimer:
This script is intended for informational and analytical purposes only and does not constitute financial advice.

Note: In the chart above I have the MCO configured to custom 2 week Bitcoin settings.
Normalization look back: 50
Composite smoothing length: 12
Weights;
RSI: 1
MACD: 1.5
ROC: 0.3
Signal look back: 5
Confirmation Max: 14

20 เม.ย.

Release Note

Update v1.3

• Improved exhaustion detection using histogram peak rollover logic
• Refined momentum burst candle coloring
• Added midline filter for bull/bear candle states to reduce noise
• Improved histogram momentum expansion detection
• Minor visual and structural improvements
This update improves signal clarity while preserving the original oscillator structure and interpretation.

20 เม.ย.

Release Note

Momentum Composite Oscillator (MCO)

The Momentum Composite Oscillator (MCO) is a cycle-based momentum indicator designed to identify expansion, exhaustion, and reversal phases within longer market cycles. It blends multiple normalized momentum measurements into a single composite structure to reveal shifts in underlying market energy.

Rather than focusing on short-term overbought or oversold conditions, MCO is designed to visualize structural momentum behavior across broader market cycles.

Core Components

• Composite Momentum Line – the primary oscillator measuring aggregated momentum conditions
• Signal Line – a smoothed reference used to detect directional shifts and momentum confirmation
• Momentum Histogram – visualizes expansion and contraction of momentum energy

Signal Map

▲ Yellow Triangle — Momentum Exhaustion
Appears when momentum is elevated and begins to weaken. These signals often occur near late-cycle peaks where upward momentum is losing strength.

▼ Red Triangle — Momentum Breakdown
Indicates momentum deterioration as the composite begins to fall below the signal line during a weakening phase.

▲ Green Triangle — Momentum Expansion
Appears when momentum begins strengthening and the composite pushes upward, often early in a new cycle phase.

▲ Cyan Triangle — Cycle Reset / Momentum Low
Appears near deep momentum contractions where market cycles have historically transitioned toward new expansion phases.

Interpretation

Momentum Expansion
When the composite rises above the signal line and momentum expands, markets are typically entering a strengthening trend phase.

Momentum Exhaustion
When the oscillator reaches elevated levels and momentum begins to contract, the indicator may signal a late-stage cycle condition.

Momentum Reset
Deep momentum contractions often occur near major cycle lows where new expansion phases can begin.

The MCO is designed primarily for higher timeframes where structural cycles are more visible. It can be applied across multiple assets to study long-duration momentum behavior and cycle structure.

This update refreshes the script image to remove chart drawings. No changes were made to the indicator logic.