Ichimoku Cloud
Five indicators in one — the complete picture of market structure
Definition
The Ichimoku Cloud (Ichimoku Kinko Hyo) is a comprehensive technical indicator developed in Japan that provides support/resistance levels, trend direction, momentum, and potential reversal signals in a single view. It consists of five components: Tenkan-sen (conversion line), Kijun-sen (base line), Senkou Span A (leading span A), Senkou Span B (leading span B), and Chikou Span (lagging span). The "cloud" is the area between Span A and Span B — price above the cloud is bullish, below is bearish.
Example
If SPX is trading above a rising green Ichimoku cloud (Span A > Span B), all signals point bullish. The Tenkan-sen crossing above Kijun-sen while price stays above the cloud is a strong buy signal ("TK cross above cloud"). When price dips into the cloud, it signals potential support/resistance — a thicker cloud means stronger support or resistance.
Related Terms
Frequently Asked Question
What is the Ichimoku Cloud?
The Ichimoku Cloud is a multi-component indicator showing trend, momentum, support, and resistance simultaneously. Price above a rising cloud is bullish; below a falling cloud is bearish. The cloud acts as support/resistance.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.