I outline these particular points on the RSI indicators all the time, but I can’t remember if I’ve ever taken the time to explain it. One way to utilize the RSI to define bull and bear markets in particular indexes and individual stocks is to watch if the RSI fluctuates between 20-60 or 40-80. This establishes whether the chart is bullish/bearish. Once you know this you can use this to establish your stops when you go to place a trade and when you are creating your “edge”.

Earlier in the month I talked about the need for the dollar to pause and during that time I felt the market would rebound somewhat. That is exactly what happened so far, but what is going to happen now? Well…I wish I knew, but the likely scenario is if the dollar finds support here, and that would most likely pressure the general indexes and the bears would resume their feast. I’d give the odds that this occurs 70-30, given how these charts below have played out.

usd

djia

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