Saturday, October 31, 2015

NYSE vs Ratio Adjusted Summation Index

Sherman and Marian McClellan's Ratio Adjusted Summation Index for the NYSE (RASI) is a particularly useful indicator to identify
when an uptrend is strong enough to continue past the initial up surge. The RASI rises from oversold below -500 up to well above +500, and
the higher the better. Failing to reach the +500 level is like a rocket that fails to achieve escape velocity, and then falls back to Earth.
It is a sign that an uptrend is not strong enough to continue, and that the recent price lows are likely to be revisited. Last Friday the
Ratio Adjusted Summation Index for the NYSE closed at 412 while the next two weeks still have a strong seasonal bias.