Universe RSI Chart
Relative Strength Index is a long standing technical analysis tool developed and introduced by J. Welles Wilder in 1978 as a momentum indicator utilizing the traditional 70/30 overbought and oversold levels. From there, Andrew Cardwell took hold and studied the indicator vigorously to find it not only helped to identify the relative momentum on the way up and the way down, it also is an excellent trend following indicator once you learn how to use it to its fullest extent.
What am I looking at? Here is a quick video rundown of what you will find on this page and why it helps.
Universe Breadth Chart
Market Breadth is one of the more traditional ways of measuring broad market participation to help gauge the health of the equity markets. Over the years it has lost some of its following to new and more shiny (complicated) market indicators, but it has never lost its usefulness. In developing the relative strength process, I added breadth measures as a relative strength pillar by comparing the breadth across the sectors and subsectors to measure relative participation levels. This chart and snapshot set is a compilation of the most common breadth indicators I have used and shared over more than a decade to give you a one stop rundown of participation.
Universe Relative Comparative Chart
Relative Comparative Charts are another important pillar in the search for relative strength and also one of the simplest. All you do is divide the index we are looking at by the comparative index. If it is going up, the index on this page is leading. If going down, it is lagging, just that simple. This chart compares the page’s equal weight index to all of the relevant indexes to our process.
Percentage Making Highs/Lows Chart
Percentage Making New Highs and New Lows is a unique way to look at a short term breadth extreme in any segment of the equity markets on both the upside and the downside. Looking over this chart for just a few seconds quickly reveals when a large enough portion of the stocks in any segment are hitting these levels they tend to be near short term inflection points. This is a complement to our other short term breadth measures above.
Equal Weighted Sector RS Rankings
Sector Relative Strength Rankings are where we begin to dig into the Power Universe to see what is inside. This first level of segmentation breaks the universe into the 11 equal weighted sectors and runs our relative strength calculations on that grouping. This part of the process combines the benefits of our front weighted relative strength price performance based calculation with the participation benefits of using the custom equal weighted indexes we build to dampen the effects of mega cap moves that can distort the true outlook of the entire sector or subsector. The default RS calculation is a three month front weighted relative strength, with buttons available to extend the time frame to a six month picture as well as the more traditional twelve month relative strength calculation.
Equal Weighted Subsector RS Rankings
Subsector Relative Strength Rankings, our next step down, gives a reasonable way to go deeper than sectors but to the point of having to deal with 150+ industries. the Subsectors give us a strong list to follow regularly so we can consistently stay on top of what is going on across the market. Just one level deeper can mean all the difference in spotting where the attention is currently.