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Dan,
Looking at the All Ordinaries index here the RSI and CMO give a similar
result to what you discovered with the S&P500.
Regards
Ian Burgoyne
Melbourne
HARELSDB@xxxxxxx wrote:
>
> I have been trading with a system that gives signals based in part on Welles
> Wilder's Relative Strength Index (RSI). I have also been carrying along a
> plot of the Chande Momentum Oscillator (CMO) with my charts, but, I wasn't
> sure why. The CMO is very closely related to the RSI and I wasn't sure that
> it was giving me any additional information. I have gained a new insight
> recently and thought it might be of interest to the list.
>
> The CMO seems to show divergences more clearly than the RSI. For example, on
> a daily plot of the S&P 500, a plot of the RSI does not show momentum
> diverging from price. That is, the recent higher high in price was
> accompanied by a higher high in the RSI. In contrast, the CMO very clearly
> shows a lower high associated with the recent higher high in price. I have
> been using 20 days for the periods for both the RSI and the CMO. In addition
> to the S&P 500 index, I have found this pattern where the CMO shows a
> divergence and the RSI does not, or does not show it as clearly, on a number
> of securities in the last few days.
>
> I hope this is useful.
>
> Dan
> Pocatello, ID USA
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