Mike Ichimoku: Trend & Momentum from Velocity
In the VOLMIKE.COM system, we don't just innovate by creating Volatility Mike; we amplify its power by applying established technical indicators to it. Mike Ichimoku is a prime example of this approach, transforming the traditional Ichimoku Kinko Hyo into a potent tool for analyzing the trend and momentum of daily percentage change, rather than just raw price.
Mike Ichimoku vs. Traditional Ichimoku: A Shift in Focus
The fundamental difference is crucial:
- Traditional Ichimoku: Applied directly to price data. It provides insights into price trend, support/resistance, and momentum based on the movement of the financial asset's price itself.
- Mike Ichimoku: Applied to the Mike indicator series. This means its components are analyzing the velocity and magnitude of price changes. This provides a unique perspective on the underlying market conviction and the strength of the momentum.
By applying Ichimoku to Mike, we gain a more nuanced and often earlier insight into shifts in market strength and potential turning points that are specifically relevant to high-velocity, short-term options trading.
The Core Components of Mike Ichimoku
Mike Ichimoku comprises several lines, but for our primary analysis and particularly in the context of "Marengo" setups, we focus on the interplay of the Mike Tenkan Sen and the Mike Kijun Sen.
Mike Tenkan Sen (Conversion Line)
- Calculation: The average of the highest high and lowest low of the Mike indicator over the past 9 periods (typically, 9 candles).
- Role: Represents the short-term momentum of Mike. It's the faster-moving component, indicating short-term direction and potential for rapid change.
Mike Kijun Sen (Base Line)
- Calculation: The average of the highest high and lowest low of the Mike indicator over the past 26 periods (typically, 26 candles).
- Role: Represents the medium-term momentum of Mike. It's the slower-moving component, indicating more sustained trends in Mike's velocity.
Mike Kijun Crosses: Signals of Momentum Shifts
The interaction between the Mike Tenkan Sen and the Mike Kijun Sen is highly significant:
- Bullish Mike Kijun Cross: Occurs when the Mike Tenkan Sen crosses above the Mike Kijun Sen. This signals a strengthening of short-term positive momentum relative to the medium-term, often preceding or confirming an upward acceleration in price.
- Bearish Mike Kijun Cross: Occurs when the Mike Tenkan Sen crosses below the Mike Kijun Sen. This indicates a weakening of short-term positive momentum or a strengthening of negative momentum, suggesting a potential downward acceleration.
(Note: While Mike Ichimoku also includes the Senkou Span A, Senkou Span B (forming the "Cloud"), and the Chikou Span, our primary focus for identifying high-velocity "Marengo" signals in the context of BBW Expansion often centers on the precise relationship of Mike to its Kijun Line, as well as the Tenkan/Kijun crosses.)
Key Importance for VOLMIKE.COM Strategy
Mike Ichimoku, particularly the Mike Kijun line, plays a critical role in our "Volatility Perfection" approach:
- Momentum Trend Identification: The position of Mike relative to its Kijun line and the direction of the Tenkan/Kijun cross provides clear insights into the prevailing momentum trend of the stock's daily percentage change.
- Confirmation for "Bishops": The Mike Kijun Line is the precise reference point for our BBW Expansion "Bishop" signals. A Green Bishop (🟣) appears during BBW Expansion when Mike is above its Kijun Line, confirming a bullish momentum ignition. A Red Bishop (🟣) appears when Mike is below its Kijun Line, confirming a bearish momentum ignition.
- Dynamic Support and Resistance: The Mike Kijun Sen often acts as a dynamic support or resistance level for the Mike indicator itself. Mike bouncing off or breaking through its Kijun line can provide key insights into the strength of the underlying velocity.
By focusing on Mike Ichimoku, we gain a unique lens into the market's momentum, enabling us to identify high-probability shifts and align with the precise conditions required for our explosive "Marengo" setups.