Ultimate Oscillator

Momentum

Larry Williams combined three timeframes into one oscillator, precisely to solve the classic problem of divergence indicators: depending on the chosen period you see a different signal.

In its original form this indicator uses volume and/or the daily range (High/Low). The scanner only has closing prices and approximates those inputs (see the note at the bottom). So treat the absolute values as indicative; the direction and the crossings remain usable.

Construction & calculation

Compute per day the Buying Pressure (closing price minus the day's low) and the True Range.
Add both up over 7, 14 and 28 periods and form the BP/TR ratio per window.
Weight those three ratios by 4, 2 and 1 — the shortest window weighs the most — and normalize to 0-100.

UO = 100 x (4 x avg7 + 2 x avg14 + 1 x avg28) / (4 + 2 + 1) with avg(n) = sum(BP,n) / sum(TR,n)

Interpretation

The oscillator moves between 0 and 100, with 30 and 70 as the classic extremes.
Williams never used the UO for levels, but solely for a full, multi-step divergence pattern.
That makes the UO rare but relatively high quality: when it fires, there is a complete pattern underneath.

How the signal works in this scanner

Buy signal (green)Williams' full pattern: (1) two price lows in the 60-bar window, where the second is lower than the first; (2) at that second low the UO makes a higher low (the divergence); (3) between the two lows the UO has dipped below 30 at least once; (4) the UO then breaks out above its highest value between the two lows. The signal only counts if that breakout occurred in the last 5 bars.

Sell signal (red)Exactly mirrored: a higher price high, a lower UO high, the UO above 70 between the two highs, and a breakdown below the intervening trough within the last 5 bars.

Watch-outs & pitfalls

This is not a crossing signal but a pattern recognition. It therefore appears far less often than the other indicators — that is by design.
The 'freshness' limit of 5 bars prevents a divergence pattern from weeks ago from remaining an active signal forever.
Requires at least 70 trading days.

Data note. The scanner works exclusively with closing prices (daily). Wherever the classic formula needs High, Low or Volume, these are approximated: the daily range via the rolling max/min of the closing price over the recent bars, and volume via the relative size of the day's move compared with the recent average. The signal logic is identical to the original, but absolute values may differ slightly from platforms that use intraday data and real volume.

Disclaimer. This explanation is educational and does not constitute investment advice. A technical signal is a probability, not a certainty: always use it together with other signals, the broader trend, the news around the stock and a predefined risk-management plan.

Generated: 26/10/2026 12:04