MACD (Moving Average Convergence Divergence)

Measures: the spread between fast and slow EMAs — whether short-term momentum is gaining or losing on the longer-term drift, and whether that spread itself is accelerating.

Formula:

MACD line  = EMA_12(C) − EMA_26(C)
Signal     = EMA_9(MACD line)
Histogram  = MACD line − Signal

Calculation: three EMA passes — two over closes, one over the MACD line itself.

How Thresher uses it (Momentum family):

• MACD line above/below Signal → ±0.40 (the primary momentum vote)
• Histogram now vs histogram 3 bars ago → ±0.20 (is momentum accelerating or fading — a second derivative check that often turns before the crossover does)

Limitations: MACD is unbounded and scale-dependent, so its absolute value is meaningless across tickers — the engine only ever reads relationships (above/below, expanding/fading), never magnitudes. Like all EMA constructs, it whipsaws in ranges; the choppy-tape confidence penalty (II.4) exists largely because of this.

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