Linear Regression Indicator: Calculation in Microsoft Excel?

Question

The Linear Regression Indicator (LRI) is a stock market indicator. It's value each day is the same as a Linear Regression Trendline (LRT). The LRI is calculated using the "least squares method." I would like to know the formula to calculate the LRI in Microsoft Excel if you could assist me.

I am uncertain how my stock charting package calculates this value, but here are some clues. For the SPY, which generally tracks the value of the S&P 500 stock index, the LRI values at the end of the trading day today were LRI(1 day)=0; LRI(2 day)=128.42; LRI(3day)=128.51. The value for LRI(2 day) is simply the closing price of the SPY for today, which was 128.42. I'm really interested in how they calculate LRI(3day), and am seeking an explanation as to why LRI(1) is 0 and LRI(2) is today's closing price.

I'm not sure whether they use the Open, High, Low and Close for each day, or just the Close or some combo. Here are those values for the last few days: (See Additional Details)

8/3: Open=127.33; High=128.55; Low=127.15; Close=128.42. 8/2: Open=127.58; High=128.46; Low=127.55; Close=128.08. 8/1: Open=127.34; High=127.38; Low=126.63; Close=127.22. 7/31: Open=127.66; High=127.96; Low=127.46; Close=127.85.

Answer 1

Excel has a function called "TREND" which accepts two colums of figures, calculated the best straight line (least squares) fit, and will extrapolate that line into the future. You specify the x and y values to esablish the curve, and then the x' values over which the curve is calculated. The x' values can extend beyond the original set of values,

Answer 2

Linear Regression Indicator Formula

Answer 3

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