• 287 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

Pay Attention to What the C-RSI Indicator is Telling You

Charts can be confusing ... can't they?

Take the Relative Strength for example. It moves from zero to 100. The half way point has to be ascertained visually, because 50 is a critical level. So, you have to watch for 51 or 49 to know when you are above or below that critical mark.

Doesn't it just make more sense to subtract 50 from the index and calculate a new index based on that?

For example: A RSI reading of 50 (neutral) minus 50 would reset the the base line to zero. So zero would become the base line, and any movement above or below it could be seen visually without even looking at the number. That is why we reset many indicators to a zero base ... so we can see them fast and efficiently without any required interpretation.

So, that is how our C-RSI Indicator was born. Today's C-RSI vs. the S&P chart is very interesting and clearly shows where we are in this rally cycle.

Take a look at the posted C-RSI chart below. There were 2 decent upside rallies since 2008 and our C-RSI was trading positive (above zero) for both rallies.

Both of these rallies ran into trouble when the C-RSI fell below its red support line. The first one ran a positive C-RSI from April 2008 to June 2008. In late May 2008, the red C-RSI support line was broken to the downside, but it wasn't until June 2008 that the C-RSI finally went negative ... and that is when the S&P went into a correction.

So, let's look at the current rally again. Our C-RSI indicator has been positive since the end of March. On June 15th. the first "crack" appeared when the C-RSI fell below its support line. Check your own charts ... the market has essentially gone nowhere since June 15th.

The positive right now, is that the C-RSI has not gone into negative territory ... at least as of yesterday's close. But, the reality is also that "risk levels" are substantially elevated when the C-RSI is below its red support line and "testing" its zero line ... so, now is a good time to be cautious.

(Note: The C-RSI is posted in many charts on our paid subscriber sites every day. Today's C-RSI chart is being shown as a courtesy to our free members today.)

 

Back to homepage

Leave a comment

Leave a comment