Re: Divergence

[Frans Derksen <fjderksen@xxxxxxxxx>]

Hello John,

For a (primitive) start try this formula:

L = llv(L,20) and RSI(14) > llv(RSI(14),20

Or (a little bit more sophisticated):

- RSI has been going up for three days.
- RSI three days ago was higher than lowest RSI in past 14 days
- Close of three days ago was lower than lowest close of the   prior 14
days will look something like this:

{RSI exploration}
         Ref(RSI(14),0) > Ref(RSI(14),-1) AND
        Ref(RSI(14),-1) > Ref(RSI(14),-2)AND
        Ref(RSI(14),-2) > Ref( LLV(RSI(14),14),-2)

        {Price exploration}
        AND Ref(CLOSE,-2) < Ref(LLV(CLOSE,14),-3)
{or:REF(C,-2) = REF(LLV(C,14),-2)}

All improvements welcome....

Rgds.
Frans


At 14:29 2-12-00 -0800, you wrote:
>One of the more interesting indicators of price reversal for me is the
>divergence that occurs between a momentum indicator and the price action.
>For example, if through some time period both price and RSI make a high and
>then price rises and RSI drops, then divergence has occured between the
>indicator and the price and a reversal in price action "might" occur.
>
>I have not been able to figure out a manner of looping thru the past 1 to 70
>periods of price and momentum indicator values to figure out if the prices
>are showing divergences or not using Metastock.
>
>Does anyone have such a formula or know where i can find it?
>
>Thanks. ................................... John
>
>