Smoothed Range Expansion Index Using High and Low RSX

Summary

The document describes a modified Range Expansion Index intended to make the oscillator smoother. The original REI, attributed to Thomas DeMark, is presented as a measure of price movement that can signal overbought or oversold conditions when strength or weakness appears. It ranges from negative to positive readings and is said to remain neutral in flat conditions.

The modification follows Mark Jurik's proposal to combine RSX values calculated from highs and lows. The suggested reading is to use color changes as early warnings of possible trend shifts and zero-line crossings as a broad indication of trend direction. A chart comparison is cited as support for the claim that the modified version is smoother while retaining similar values, but no quantitative tests or trading results are supplied. The text does not specify entry, exit, or risk rules, so the indicator signals require independent validation and cannot alone establish a profitable strategy.

Key ideas

• The Range Expansion Index is described as an oscillator for identifying price strength, weakness, and possible overbought or oversold areas.
• The modified version combines RSX readings from high and low prices to smooth the indicator.
• Color changes are proposed as early trend-change warnings, while zero-line crossings indicate general direction.
• The comparison offered is visual and does not include quantitative performance testing or complete trading rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.