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Ichimoku Cloud: Tenkan, Kijun, Senkou Spans and Price vs Cloud

The Ichimoku cloud explained: 9/26/52 midpoints, spans displaced 26 sessions, and what above, below or inside the cloud conventionally means.

Reviewed · Sources at the end · How Vyreon measures
Vyreon's per-security reports are not live yet; this page describes what they will measure. Examples are illustrative.

The Ichimoku cloud (Ichimoku Kinko Hyo) is a charting system built from the midpoints of past price ranges over 9, 26 and 52 sessions. Two of its lines are shifted 26 sessions forward to form the "cloud", and whether the price sits above, below or inside that cloud is its conventional trend reading.

Ichimoku Lines And Formulas

Each line is a midpoint: (highest high + lowest low) ÷ 2 over a window.

  • Tenkan-sen (conversion line): midpoint of the last 9 sessions.
  • Kijun-sen (base line): midpoint of the last 26 sessions.
  • Senkou span A (leading span A): (tenkan + kijun) ÷ 2, plotted 26 sessions ahead.
  • Senkou span B (leading span B): midpoint of the last 52 sessions, plotted 26 sessions ahead.

The area between span A and span B is the cloud (kumo). Because the spans are displaced, the cloud in force today was calculated from data 26 sessions ago.

Illustrative example: if the 9-session high and low are 110 and 100, the tenkan is 105. If the 26-session high and low are 112 and 92, the kijun is 102.

Price Vs The Cloud

  • Above the cloud: the close is higher than both spans.
  • Below the cloud: the close is lower than both spans.
  • Inside the cloud: the close is between them.

By convention, above is read as an uptrend, below as a downtrend and inside as undecided. A tenkan above the kijun is conventionally read as shorter-term strength relative to the medium term.

How Vyreon Calculates It

Vyreon uses the standard 9, 26 and 52 settings on daily bars adjusted for splits and dividends. It reports the tenkan and kijun for the latest session, the span A and span B values in force today (computed 26 sessions earlier), the price position (above, below or inside the cloud) and tenkan vs kijun (above, below or equal). It needs 78 sessions of history (52 plus the 26-session displacement). Vyreon does not report the chikou span (lagging span), which is the close plotted 26 sessions back.

What The Ichimoku Cloud Does Not Tell You

  • The "above/below the cloud" reading is a convention, not a measured cause or a forecast.
  • The 9, 26 and 52 settings are often attributed to the six-day trading week used in Japan when the system was developed; they have no special mathematical status.
  • Midpoints ignore everything between the extremes, including volume and closing prices.

Related: moving averages · Parabolic SAR · price channels · MACD

Sources

  • Goichi Hosoda, who developed Ichimoku Kinko Hyo and published it under the pen name Ichimoku Sanjin.
  • Nicole Elliott, Ichimoku Charts: An Introduction to Ichimoku Kinko Clouds (Harriman House, 2007).

Readings of the price against the cloud are trading conventions; we know of no peer-reviewed source establishing them.