The RSI momentum indicator when used to measure stock and stock indices almost always needs a bearish divergence before a significate top can be achieved.
The FTSE 100 (UKX) since the February 2016 bottom is a good example.
Note the April and August RSI tops that were followed by only moderate declines that ultimately lead to higher prices.
The decline from the January 2017 UKX top has so far been in three waves implying it is just a correction in an on going bull market.
Watch the UKX from 2/7 to 2/10. If a new price high is made with an RSI bearish divergence it could signal the start of a multi-month bear trend.
Mark
The FTSE 100 (UKX) since the February 2016 bottom is a good example.
Note the April and August RSI tops that were followed by only moderate declines that ultimately lead to higher prices.
The decline from the January 2017 UKX top has so far been in three waves implying it is just a correction in an on going bull market.
Watch the UKX from 2/7 to 2/10. If a new price high is made with an RSI bearish divergence it could signal the start of a multi-month bear trend.
Mark