Overbought-Oversold model

This is a rather unique model to determine overbought or oversold I designed many years ago. The math uses closing prices and after a lot of spreadsheet calculations we get a value. Above .80 is very overbought and below .30 very oversold.

Thx, interesting stuff. Looking at the daily OB/OS since the end of last year, it looks like the trend throughout has been to become more overbought and less oversold as prices dropped. The rally period preceding this was just the opposite. Can turning points in these trend channels be identified in a useful way?

Thx, interesting stuff. Looking at the daily OB/OS since the end of last year, it looks like the trend throughout has been to become more overbought and less oversold as prices dropped. The rally period preceding this was just the opposite. Can turning points in these trend channels be identified in a useful way?

Yes, that is a very useful display by the model. The model shows us where peak acceleration occurs. Note from the peak at .91 on 12-28-06 as price continued to close higher a loss of momentum was evident. Since the December 2007 low by the model we are seeing the model accelerate toward peak overbought and higher oversold values. Odds are we have seen peak overbought. This is a unique model, love it.

Best,
Larry

Edited by LarryT, 12 April 2008 - 10:09 AM.

Thx, interesting stuff. Looking at the daily OB/OS since the end of last year, it looks like the trend throughout has been to become more overbought and less oversold as prices dropped. The rally period preceding this was just the opposite. Can turning points in these trend channels be identified in a useful way?

Yes, that is a very useful display by the model. The model shows us where peak acceleration occurs. Note from the peak at .91 on 12-28-06 as price continued to close higher a loss of momentum was evident. Since the December 2007 low by the model we are seeing the model accelerate toward peak overbought and higher oversold values. Odds are we have seen peak overbought. This is a unique model, love it.

Best,
Larry

"Higher oversold values" meaning "less oversold levels" as represented by higher low values on the chart, correct? Are daily and monthy in diametric opposition now?

Edited by spielchekr, 12 April 2008 - 10:26 AM.

That monthly can just stay oversold for one hell of a long time... can't it... Sure looks to me like we think we're oversold but we ain't seen nuttin' yet, and once we get to nuttin' we going to linger there for a long, long time....

In fact, for that last bear market, we're sitting right on overbought...

The length of the steep decline in the chart implies no letup either.

Thanks Larry, that says a lot, I'll leave the shorter terms to the hummingbirds, that monthly tells me all I really need to know here...

Hi Larry ... I think you could have saved yourself some trouble. Try overlaying Williams%R 10 period onto that monthly chart. Won't look much different. Please correct me if I'm wrong.