# Custom Formula Collection

Investor Preference Index

This indicator was discussed in the December 1997 *Technical Analysis of Stocks &Commodities* magazine, page 19. The article was written by Cyril V. Smith Jr.

"This indicator, a long - term stock market investment tool, compares the performance of the S&P 500 to the New York Stock Exchange index to measure sentiment. The theory is that investors have a preference for certain types of investments, blue chips versus mid-cap, during phases of a bull market."

To plot this in MetaStock for Windows, follow these instructions. When complete, if you save this as a chart, you will simply need to load the chart and it will recalculate using the newest data.

- Open a chart of the S&P 500.

- Open a chart of the New York Stock Exchange index.

- Drag the S&P 500 price plot into the NYSE chart.

- Drop the indicator listed below on the plot of the S&P 500. The plot will turn a different color when you are pointing at it.

- The resultant plot is the Investor Preference Index.

Investor Preference Index Formula:

Sum(Mov(ROC(Log(C),24,%)-ROC(Log(P),24,%),15,S)-Mov(ROC(Log(C),24,%)-ROC(Log(P),24,%),38,S),54)+1)*100

**System test:**

- Enter Long

C=HHV(C,26)

- Close Long

Fml("Investor Preference Index")<97.6 AND ROC(Fml("Investor Preference Index"),2,$)<=(-.04)

For additional help with formulas, please see the Formula Primer.

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