To help in screening for stocks/funds/indexes that are trending in the direction we want, Carl Swenlin has developed a special PMO (Price Momentum Oscillator). It is calculated using a proprietary rate of change calculation, and the result helps us define the intermediate-term price trend.

The PMO is strictly an internal measure of strength for the security being measured, and, while the price line will usually zigzag in the direction of the trend, the PMO tends to move steadily in a given direction. As a result, when the PMO changes direction, it raises a flag that the price trend might be changing, and should prompt us to keep a close watch on the price chart. The PMO also oscillates in relation to a Zero Line. Generally we interpret PMO movement thusly: Rising above zero is best, and falling below zero is worst; however, it is at PMO turning points where we look for the best entry and exit points.