This indicator was published by Thomas DeMark in “The New Science of Technical Analysis” it identifies potential price bottoms and tops. It accomplishes this by making price comparisons from one bar to the next and measuring the level of price demand.
If the current period (bar) maximum is higher, the respective difference between the two will be registered. If the current maximum is lower or equaling the maximum of the previous period, the zero value will be registered. The differences received for N periods are then summarized.
The received value is used as the numerator of the DeMarker and will be divided by the same value plus the sum of differences between the price minima of the previous and the current periods (bars).
If the current price minimum is greater than that of the previous bar, the zero value will be registered. When the indicator falls below 30, the bullish price reversal should be expected. When the indicator rises above 70, the bearish price reversal should be expected.