Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
Fox in the Henhouse: Why Interest Rates Are Rising - 23rd Apr 18
Stocks and Bonds, This is Not a Market - 23rd Apr 18
Happy Anniversary Silver Investors! - 23rd Apr 18
The Hottest Commodity Play In 2018 - 23rd Apr 18
Stock Market Correction Turns Consolidation - 23rd Apr 18
Silver Squeeze, Gold Fails & GDX Breadth - 23rd Apr 18
US Economy Is Cooked, the Growth Cycle has Peaked - 23rd Apr 18
Inflation, With a Shelf Life - 23rd Apr 18 - Gary_Tanashian
Stock Market Predictive Modeling Is Calling For A Continued Rally - 22nd Apr 18
SWEATCOIN - Get PAID to WALK! Incentive to Burn Fat and Lose Weight - Review - 22nd Apr 18
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

A Stock Technical Trading Tip You Can Use ...

Stock-Markets / Stock Markets 2010 May 28, 2010 - 11:40 AM GMT

By: Marty_Chenard

Stock-Markets

Best Financial Markets Analysis ArticleThe markets will be closed on Monday for the Memorial Day Holiday. Some of you may want to play around with charts over the weekend, so I will leave you with a technical tip.

The technical tip involves the use of two different Relative Strength numbers used simultaneously ... a daily Relative Strength number of 9 and the other set at 30.


As you know, I dislike indicator readings when they go from 0 to 100 because your mind has to be engaged to "read" them. I have always felt that a neutral reading of 50 on the RSI should be expressed as 0 which is clearly a neutral number that needs no interpretation. Likewise, the indicator should either clearly read POSITIVE or NEGATIVE.

This is why I have recreated the RSI as a zero based indicator. You can do the same by simply creating a new indicator that takes the old RSI and subtract the number 50 from the readings. Today's C-RSI chart shows you what the result looks like for a RSI of 9 and 30.

Let's now move on to the tip phase of today's update. I had mentioned earlier, that you want to plot the 9 and 30 RSI simultaneously on the same chart. Below is today's chart going back to last December.

Conditions that matter: 1. For the 9 RSI to be positive or negative. 2. To notice if the 30 RSI is positive or negative while the 9 RSI may be oscillating above or below neutral. 3. For the 9 RSI to be trending above or below the blue RSI 30 line.

Let's take a look at today's chart. Notice that I have labeled four rectangular boxes from A to D. These areas depict times of signal changes using these two indicators.

Let's start with area A. In that time frame, we have the 30 RSI positive and trending up the entire time ... that is a positive market bias condition. The green line showing the 9 RSI started off by oscillating above and below the zero line ... while the 30 RSI had a positive bias. Note that the 9 RSI, even though oscillating, was in a technical up trend because it was making higher/highs and higher/lows. Finally, toward the end of the move, the 9 RSI reversed its trend because it started to make lower/tops and lower/bottoms. After that warning, the 9 RSI went negative at the red vertical line and the 30 RSI broke its red support line. That started the down condition. (Area C is similar, but a little more complex because the 9 RSI down trended and then re-trended up. While it did so, the 9 RSI remained above the 30 RSI which was bullish. The C move finally broke its red line support on the 30 RSI and then the 9 RSI when negative afterwards. That started the down trend we just experienced.)

Now, let's look at areas B and D. In the B area, the 30 RSI went negative with the 9 RSI staying negative until it crossed over positive at the blue vertical line. That ended the down trend, because the 30 RSI followed by going positive and up trending by making higher/highs and higher/lows.

So now we are at area D. Both the 9 and 30 RSI are in negative territory. But what else can you notice now? For one thing, the 9 RSI just made a higher/low so that COULD be the start of it changing to an up trend. To do so, the 9 RSI will need to make a higher/high which it did not do at the close on Thursday.

So, that is one of the things you want to look for. The other, is for the 9 RSI to move above the zero line and go positive ... and then to be followed by the 30 RSI in making higher/highs and higher/lows.

By the way, even though the 9 RSI has not made a higher/high yet, it did do something that was positive and worth noting. What was it? The green 9 RSI closed above the blue 30 RSI which showed an 9 to 30 RSI strength improvement.

Technical analysis can be learned by anyone, but it can take a lot of time to do. I start at 5:30 AM everyday day, so I can attest to how much work it is. In today's environment, it is also beneficial to buy unusual data streams not available to the investing public ... such as the Institutional raw data we purchase. Some investors like to do all of this for themselves, and others like to subscribe to a service like ours and let us do all the work. In any case, one of the most important things an investor can do, is to continue to learn new things because the market is always changing and it always leaves the non-learners behind as it move forward.

** Feel free to share this page with others by using the "Send this Page to a Friend" link below.

Send This Page To a Friend

By Marty Chenard
http://www.stocktiming.com/

Please Note: We do not issue Buy or Sell timing recommendations on these Free daily update pages . I hope you understand, that in fairness, our Buy/Sell recommendations and advanced market Models are only available to our paid subscribers on a password required basis. Membership information

Marty Chenard is the Author and Teacher of two Seminar Courses on "Advanced Technical Analysis Investing", Mr. Chenard has been investing for over 30 years. In 2001 when the NASDAQ dropped 24.5%, his personal investment performance for the year was a gain of 57.428%. He is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools.  As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL.  He is an advanced technical analyst and not an investment advisor, nor a securities broker.

Marty Chenard Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules