Momentumdraws in its own pane

How far price has strayed from its own average, scaled by its typical deviation. Beyond ±100 marks a statistically unusual excursion.

On this chart: 20 periods, Lambert's 0.015 scaling.

The Commodity Channel Index measures the distance between the typical price (high + low + close, averaged) and its 20-period mean, divided by the mean absolute deviation. Lambert's 0.015 constant scales it so roughly three-quarters of readings land inside ±100 — which is what makes ±100 a meaningful fence rather than an arbitrary line.

Inside ±100 is ordinary fluctuation. Beyond +100 the stock is stretched above its recent norm; beyond −100, below it. Unlike RSI, CCI is unbounded — a −250 print is a genuinely rare washout, and the indicator preserves that information instead of saturating.

Deep negative readings describe capitulation-grade selling — the environment where implied volatility, and therefore put premium, spikes on quality names. The unbounded scale is useful precisely because it distinguishes a routine dip (−100) from a rare one (−250).

Like everything in this guide, these are descriptions of conditions and reference levels — context for your own decisions, not instructions to trade.