This article is from the Glossary of Technical Analysis Terms.
The Norton High/Low Indicator uses results from the Demand Index and the Stochastic study and is designed to pick tops and bottoms on long term price charts. Two lines are generated: the NLP line and the NHP line. The system also uses level lines at -2 and -3. The NLP line crossing -3 to the downside is the signal that a new bottom will occur in 4-6 periods, using daily, weekly, or mnthly data. Similarly, the NHP line crossing -3 to the downside indicates a new top in the same time frame. The indicator tends to be more reliable using longer term data (weekly or monthly). When either indicator drops below the - 3 level, a reversal may be imminent. The reversal (or hook) is the signal to enter the market. For greater reliability, use the Norton High/Low Indicator together with other studies for confirmation.
A way to measure volatility is to measure the daily ranges between the high and the low. Volatility is high when the daily range is large and low when the daily range is small. The Notis %V study contains two separate indicators. It divides market volatility into upward and downward components (UVLT and DVLT). Both are plotted separately in the same window, and can be plotted as an oscillator. The upward component is also compared to the total volatility (UVLT + DVLT) and expressed as a percentage; thus the name, %V. Volatility can be a key to options trading. A good sense of market volatility can help you avoid those frustrating times when the market moves your way but your option still loses value.