The DeMark Range Expansion Index for Overbought and Oversold Timing

Summary

The document explains the DeMark Range Expansion Index (TD REI), an arithmetic price oscillator intended for market timing. It compares the current high and low with those from two sessions earlier, then applies additional lookback conditions to decide whether that day contributes to the calculation or is set to zero. The qualifying daily values are accumulated over five sessions and normalized by the absolute high and low changes, producing an oscillator bounded in the stated description between negative and positive 100.

The page identifies readings at or above 45 as overbought and readings at or below negative 45 as oversold. It motivates the arithmetic construction as a way to address issues associated with exponentially calculated oscillators such as MACD, but offers no comparative study or performance evidence. It includes an implementation-style formula, though the condition logic is difficult to reconcile with the prose and should be checked against an authoritative specification before use. As with other timing oscillators, the thresholds are signals to interpret in context, not proof of a reversal or a standalone trading system.

Key ideas

• TD REI compares highs and lows with values from two sessions earlier.
• Lookback conditions determine whether a daily movement contributes to the numerator.
• The index normalizes five-session qualifying movement by absolute price movement.
• The document gives overbought and oversold reference thresholds of 45 and negative 45.
• No empirical comparison or trading results are provided, and the coded conditions merit verification.

Tags

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