reply to DCengr
#11
Posted 21 January 2007 - 09:55 PM
I'll bite, here is the relative strength line of the unweighted-weighted NYA. Since the entire daily series is displayed, it's difficult to tell, but there has been a slight divergence of the unweighted-weighted NYA relative strength indicator over the past two days. The indicator has done a yoeman's job in telegraphing correct divergences over the past 5+ years. One glaring failure (circled in green) in the unweighted-weighted relative strength (RS) indicator was the weighted NYA advance from its mid-June 2006 bottom. The RS line exhibited weakness from the price low, and was confirmed by the price-change-volume ($PCV) cumulative line which was discussed in a thread on Technical Watch last fall. Yet another example no single indicator is right all of the time.
The current two-day divergence in the RS line cannot yet be interpreted as a definitive warning flag, but warrants close monitoring over the next few trading sessions.
FWIW
Randy
#12
Posted 21 January 2007 - 10:11 PM
DC,
I'll bite, here is the relative strength line of the unweighted-weighted NYA. Since the entire daily series is displayed, it's difficult to tell, but there has been a slight divergence of the unweighted-weighted NYA relative strength indicator over the past two days. The indicator has done a yoeman's job in telegraphing correct divergences over the past 5+ years. One glaring failure (circled in green) in the unweighted-weighted relative strength (RS) indicator was the weighted NYA advance from its mid-June 2006 bottom. The RS line exhibited weakness from the price low, and was confirmed by the price-change-volume ($PCV) cumulative line which was discussed in a thread on Technical Watch last fall. Yet another example no single indicator is right all of the time.
The current two-day divergence in the RS line cannot yet be interpreted as a definitive warning flag, but warrants close monitoring over the next few trading sessions.
FWIW
Randy
Thanks Randy
I think that the green area isn't a failure as much as its a bullish divergence, not unlike the bullish divergence you get with cumulative A-D line vs price. Maybe the failure is more like in 2002.. where relative strength ratio was strong but price took a big nose dive.
I also want to point out that the slope of this relative strength line is not as robust as you see between 2003-2004 period. That is the area which I think makes this current advance different than the advance of 2003-2004.