Continuation Index
An oscillator that identifies trend onset and exhaustion by comparing a fast UltimateSmoother with a Generalized Laguerre filter.
Usage
Use to measure whether a price move is likely to continue or reverse based on cycle analysis. High index values suggest trend continuation; low values suggest an impending cycle turn.
Background
The Continuation Index measures the persistence of directional price movement relative to the dominant cycle. Ehlers derives it from the cycle phase velocity — when phase advances quickly in one direction, momentum is strong and continuation is likely; slow or reversing phase suggests the move is exhausting.
Parameters
gamma(default: 0.8): Laguerre gamma parameterorder(default: 8): Laguerre filter orderlength(default: 40): Base smoothing length
Formula
[ US = UltimateSmoother(Close, Length/2) ] [ LG = Laguerre(Close, \gamma, Order, Length) ] [ Variance = SMA(|US - LG|, Length) ] [ Ref = 2 \times (US - LG) / Variance ] [ CI = \tanh(Ref) ]