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The graph of individual RSI and MeanRSI on the same pane is very
interesting. Moving from ticker to ticker, you may see stocks above
or below the MeanRSI for various periods.
I find more expressive the MeanRSI than the RSI of the index.
Delays are not important. During an uptrend, the majority goes up.
Stocks do not move independently [if this will happen, the MeanRSI
will be mostly flat, with small fluctuations around 50].
Looking at your interesting gif [although the synthesis of ^NDX was
not the same in 1999 or 2000] we can read some characteristics.
During 1999, the market was steady up and nobody was wondering why or
how. It was a certain fact. The result is a more narrow band for RSI.
After the decline of 2000, the main characteristic is uncertainity
[so many opinions for the Lowest Low and now, 2,5 years later, nobody
can speak for a safe change of the downtrend...].
But, this uncertainity and this volatility has a good side-effect :
The band of RSI [and consequently the MeanRSI] is more wide and this
fact gives VERY good trading opportunities.
This is my main question for the next 1 or 2 years: Shall this market
remain as uncertain as the last two years ?
A positive answer is rewarded with great profits behind the curtain.
RSI and MeanRSI is a measure of uncertainity for any market.
And we can make great profits from uncertainity, not only now but
whenever is the main sentiment in the market.
Dimitris Tsokakis
--- In amibroker@xxxx, "Ken Close" <closeks@xxxx> wrote:
> DT: In the attached chart, the red RSI is your MeanRSI while the
yellow is
> the RSI() of NDX. The MeanRSI seems to have the function
of "smoothing" the
> spikes in RSI as read by the RSI of the Index. I am not sure why
this is.
> It is possible this is like a "smoothing" function without time
delay and
> could result in more accurate signals (using RSI or rather MeanRSI).
>
> As to the future of the NDX market as told by this indicator: more
downward
> price movement until the indicator is lower, then a rebound of some
> magnitude.
>
> I have tried the MeanRSI on other watchlists and it provides an
interesting
> view of strength vs an index. I did this only by eyeball but I
guess one
> could construct a relative strength MeanRSI =
> MeanRSI(Watchlist)/MeanRSI(NDX) [or RUT, or SP500, or...].
>
> What do you think the future is for NDX or other indeces?
>
> Ken
> -----Original Message-----
> From: Dimitris Tsokakis [mailto:TSOKAKIS@x...]
> Sent: Sunday, April 28, 2002 7:21 AM
> To: amibroker@xxxx
> Subject: [amibroker] The past and the future of the MeanRSI
>
>
> For a group of n stocks, the MeanRSI is
> MeanRSI=(RSI1+RSI2+...+RSIn)/n.
> With the help of Addtocomposite() function it is easily calculated
from the
> scan
>
> R=IIf(RSI()>=0 AND RSI()<=100,RSI(),0);
> AddToComposite(R,"~SUMRSI","C");
> AddToComposite(1,"~COUNT","V");
> Buy=0;
>
> as the quantity
> MeanRSI=Foreign("~SUMRSI","C")/Foreign("~COUNT","V");
> which may be plotted or used in AA systems.
> For ^NDX group, the graph of the MeanRSI since early 2000 is in the
att.
> gif.
> For the lower band [36,38] and upper line [60], the MeanRSI gives
huge
> profits for the
> whole Market and the majority of the 101 stocks.
> My [reasonable] question is about the future of the MeanRSI.
> Will it oscillates in this zone ? Will it be more flat in the
future and
> oscillate for a long time, say, in the
> more narrow [40,55] band ?[this means that the ^NDX market will
change its
> "style" and behave more
> like S&P or other cool indexes].
> This is the main question about the UNKNOWN future of ^NDX market.
> Any bright idea ?
> Dimitris Tsokakis
> PS. Profits for [36,38]/60 band exceed +1000% for the whole market
for the
> last 2 years.
>
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