A First Look at Standard MIDAS Support/Resistance Curves with Open Interest
This introduction to open interest is sufficient to move us on to what would be a first reason for using the MIDAS approach with open interest instead of volume.
Figure 12.1 is a weekly chart of continuous CBOT soybean futures. The lower pane is weekly volume with a 50-period moving average, the upper pane is weekly open interest data, and the middle pane between the two vertical bars is an aggressive 20-month primary price uptrend from June 2006 to February 2008. Because the chart is somewhat compressed, it's difficult to appreciate just how sharply the volume moving average is trending downwards in the lower pane. Thus, what is interesting about this chart is that we ...
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