Chaikin Money Flow
What it is: it ignores where a stock opened and asks one question per day — *where in its range did it CLOSE?* Closing at the high scores +1, at the low -1, mid-range 0. Multiply by that day's volume, average over 21 days.
Why the close: the open is set by overnight orders and news. The close is where the market settled after a full session of argument, and it is the price index funds and most institutions are benchmarked to. Persistent closes near the high on heavy volume is what accumulation actually looks like in the tape.
How traders use it:
• CMF > 0 for weeks → quiet accumulation, even in a flat price
• CMF < 0 while price grinds up → the rally is thin
• The divergence is the signal; the level rarely is
Same family: Accumulation/Distribution is the undamped running total of this, and Twiggs Money Flow is a smoothed variant that handles gaps better. Run one of the three, not all three — they will agree with each other and you will mistake that for confirmation.