A=Commodity symbol ,Month &Year of
contract M=RSI
Number NOTE: The most important thing to remember about our RSI is that you want to let it LEAD. The daily graphs are ideal for identifying the short-term trends in the market. To review examples of Floyd's recent daily reports, click below! Click
here to review Floyd's 7/8/01 Report! The short-term trends are defined by where the current closing prices are in reference to the 10 and 18 day moving averages, along with the position & structure of both moving averages. We look for RSI divergence primarily to uncover hidden strength or weakness in a market. We are able to achieve this by comparing the RSI with prices together side-by-side (in one window). We are looking for clues from the RSI about the true strength or weakness of a market. If a market is strong, the RSI should track right along with the price changes, and typically you will observe the RSI plotting above the prices. On the other side of the coin, as the market trades higher and higher in price, it could be weakening internally (without showing signs in closing prices). An example would be closing off the highs. These tends to leave a lot of green above the black closing line. This gets picked up in Floyd's proprietary RSI formula. Divergence between RSI and price provides us insight on the potential next move. However, it is vital to wait for price to confirm the RSI divergence and begin moving in the direction anticipated by the RSI (leading indicator). * Divergence exists when the price makes a higher high, and the RSI fails to make a higher high. At that point you would have "divergence". Below are a couple examples of diverging RSI.
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position trades!!! |
