trend check?

one of the most popular, most important and least understood and confusing aspect in trading is.....trend.

"trend is your friend!" it is said. but just as in normal world, it is difficult to know who is your true friend, it is equally if not more difficult to know what is the underlying, undercurrent, true trend of the market as of now.

trading without knowing the underlying trend is like para-gliding without knowing the direction and speed of the wind.

as i said in one of previous articles, if you are pro-trend even your blunders are likely to be pardoned. even if a new trader knows nothing about the market, he or she is almost sure to make money if only he or she takes pro-trend trades, sticks to it and doesn't vibrate too much (which market tries hard to make you to).

while a pro-trend ill-timed casual trade is likely to give profit (or atleast little or no loss), a well-timed studied pro-trend trade can give snowball profits washing away all self-doubts.

trend is decided by the market forces endorsed by the operators who know almost all.

and many a times, the trend is not obvious, by choice. market fluctuates a lot making the retail trader believe that either there is no trend or trapping the poor fellow take the wrong trend as the trend.

how is trend decided? 

i pondered over this question for many many months and came out with different answers. i knew that the key to trading success lies in the lock of "trend". over the time, i shortlisted and devised some methods to know the real trend.

the three top shortlisted tools for knowing the real underlined undercurrent trend are:

- moving average

- rsi

- options premium data analyses

but curiously, but not so surprisingly (after you read the game plan of the operators putlined below), all three parameters above are not awake at the same time at any time. i guess this is deliberate, to confuse and trap the prey.

while there are many other ways to know the trend, these are among the best. for these tools are effcient in knowing a hidden, camouflaged or subtle trend as well.

and the good thing is that all three of these are technically and genetically different and hence independent and without influence from each other. 

in my blog www.niftyshots.blogspot.com, i will henceforth, try and share regularly trend for the current nifty series based on my study of the above parameters. since trend changes max 2-3 times a month, don't be surprised if the updation about it in the blog is not daily. so, when i share the trend direction, it indicates the trend on that day / during those days of that series. it may change after a few days as and if market decides for the same.

also, note that i call the trend - underlying trend, because many a times, a trend is either not obvious or not visible. for major portion of the time, operators will not like to let the trend be known. after all, operators are against the majority. and they want the minority to be as small as possible. they will try every trick of the trade to not let you know what the trend is going to be before the explosive breakout or breakdown. or, they will not like you to know that they are accumulating or distributing. accumulation and distribution phases happen before the trend is actually visible. 

what this means is that a trend is there even before it appears on the screen. also, a trend may be there even when there is no movement on the graph. just like a snake which is alive and waiting with held breath, even when it is motionless. not only that, a trend may be up even when the market may move 50-100 points down in one or few days.....vice verse is also true. 

operators do whatever is possible to keep everyone confused. they want you to take wrong sides. and once having done that they tend to move the market so fast that everyone is left stranded behind high and dry.

having said that, i want to end by saying that while operators do a lot of things to confuse and trick retail traders, they leave a few clear, inevitable and shameless clues that reveal the trend for the keen silent emotionless motionless eye.

happy "trading"

what do rsi and william%r say?

i regularly post my views on nifty as well as bank nifty on the basis of rsi and william%r in the following link

http://www.mudraa.com/trading/103696/0/what-do-rsi-and-williamr-say-js.html

what do rsi and willaim%r say?

one of my pride learnings have been rsi and william%r.

in this thread i will be sharing the outlook for nifty as well as bank nifty etc. on the basis of these two super indicators.

i wanted to keep this thread different from the one based on options data for 2 reasons

1. options data is an altogether different language

2. options data can tell you reasonably accurately for the next 1-2-3 days whereas indicators can help you see a few days or weeks or months in advance.

(please treat this thread as pure sharing of my notes. please do your own research before trading.)

 Jagmohan



http://www.mudraa.com/trading/103696/0/what-do-rsi-and-williamr-say-js.html

how to know what the operators are doing?

how about a graph

of operator activity?

what if we had a chart

which showed us

when the operator is buying

when the operator is selling

and when the operator is simply letting the price drift

without much support to the opposite side?

if only we had a chart

which told us

when the operator was accumulating

and when he was distributing!



the amazing fact is

that such a graph actually exists!

it was right under our nose since ages

but was never looked at from this angle.



yes,

i am talking about

the rsi graph.



amazing and unbelievable as it may sound initially to you

an rsi chart

is not just the momentum indicator

it is the defacto graph

chart of the operator activity.



when the price and rsi are rising together

operator is buying,

when price is rising and the rsi is flat

operator has started distributing

and the general trader momentum has picked,

when the price is still rising

while the rsi has started to fall

the operator is distributing.

and when the price starts to fall

the operator's distribution is at an advanced stage

-the collapse is on the cards.



similar cycle occurs

during downturns.



know the operator movement better

to trade better.

signals of collapse and suck-up!

when does a range-bound price finally collapse?
when does a range-bound price finally shoot up?

is there any signal?

fortunately, there is one!

when price is rising slowly
but rsi rises considerably
almost from below-20 to 70plus
many times
it is about to be sucked up sharp!

when price is sliding slowly
but rsi slides quite a bit
almost from 80-plus down into 30s
many times
it is about to collapse!





remember the only condition : the price must have been range-bound before this condition.

high probability turning points

from my experience i have seen that price has high probability of turning at the following
signals:

level 1 signal: william%r reaches extreme, rsi still away

level 2 signal: william%r stays at extreme, rsi reaches extreme

level 3 signal: william%r and rsi together reach extreme

only a very powerful rally can bulldoze all these three levels of signals.

this information can be used to trade at specific points with stop loss.

just make sure that both rsi as well as william%r are of same duration

e.g. if u r taking rsi(14) then william(14) should be taken

and if u r taking rsi (10) then william(10) should be taken

also, same duration chart is to be taken, whether 1 month or 1 year or 5 days etc.

7 secrets about 'RSI' experts don't want U to know!

RSI is the most referred, famous and discussed technical indicator.
You will find RSI's mention in almost every trade talk!
Every website, every channel, every forum refers to RSI every now or then.
Whenever anyone talks about RSI, all they have in mind is the 70/30 boundary!
Above 70 they take the stock or market as overbought
and below 30 they they take them as oversold!
That is all!
At best this 70/30 line is replaced with a 80/20 line!
Everyone starts waiting for the price to fall when rsi crosses above upper line
And they start waiting for the price to rise when rsi crosses below the lower line!
I don't know when or how it happened
but RSI 70/30 overbought/oversold myth has become a monster by now.
A wrong impression has been created.
Almost every trader has started looking for the wrong thing while using RSI.
They feel secure to short above 80 or 70 rsi and long below 30 or 20 rsi....
...and get trapped!
Given below are the 7 facts about RSI which are much more important than the 70/30 or 80/20 lines....so important that I look only at these rather than 70/30 lines!
1. Failure Swing Point
= If you must learn only one thing about RSI, this is it.
2. Retreat
= Just check how much the price has retreated versus the retreat of the rsi. This holds vital info.
3. Rally v/s Ranging
= RSI trigger points change depending upon whether the markets are trending or ranging.
4. Pro v/s Anti-Rally
= RSI effectiveness changes depending upon whether we are trading pro the trend or anti the trend!
5. RSI v/s William%R
= Like a Pizza with Cola, RSI's best friend is William % R. These two indicators make terrific company. You just can't mistake the signal when two are together!
6. Divergence
= This is the point where RSI rocket starts its reverse counting at the end of the rally (and not the 70 or 80 line!)
7. Outer RSI
= It matters less where the rsi stands. What matters more is where the outer RSI stands. e.g. RSI 14/1day on 3 month chart is the outer RSI of RSI 14/30min on 1 month chart!

RSI-SMA Doubletrap technique (II)

1) Buy when priceline cuts the SMA 34 line from below after bullish divergence between RSI 14/30min and priceline on 1 month chart (Bullish divergence = When price is going down and rsi going up).

Hold till priceline cuts SMA 34 line from above.

2) Short when priceline cuts the SMA 34 line from above after there is bearish divergence between RSI 14/30min and priceline on 1 month chart. (Bearish Divergence = when price is going up and rsi is going down).

Hold till priceline cuts SMA 34 line from below.

When to square-off and reverse?

When to square-off and reverse?

A. If the rsi-run from lower to higher extreme or that from higher to lower extreme is stepped and not straight, it has been a rally and not a sell-off or buy-in.

B. If the rsi-run from lower to higher extreme or that from higher to lower is NOT stepped but straight, it has been a sell-off or buy-in and NOT a rally (unless it is coming out of a ranging/consolidation period, in which case it can be a rally)

square-off and take reverse positon

at the first lower high (in case of long unwinding)

at the first higher low (in case of short covering)

But in case A

do this after the divergence between rsi and priceline

and in case B

divergence is not likely to happen, so no need to wait for it.

Pl note: 1) Play with strict stoploss. You can always retake position.

2) When the market or stock is ranging/consolidating, you can square-off even before lower high or higher low, at the time of rsi touching extreme.

3) Only those graphs should be used which give high resolution tickers. The above mentioned observations have been derived using Google Finance charts. 1month chart with 30 min ticker and 3-6 month chart using 1 day ticker. I have seen that many other chart sources use much biger ticker and hence low sentivity.

Doing a SAR with RSI and William%R

See the peak on the left of A?

That was the peak when rsi 14/30min on 1 month chart was at the upper extreme.

Should U have squared-off at that time?

I suggest you don't. nobody knows whether Nifty rally will be stretched to more height.

In such cases, always sell on the lower high.

In this case peak A is the lower high after the peak rsi.

This is the clear hint that nifty is going to correct.

So at this point square off the longs and take fresh short position.

========

At point B, rsi has reached the lower extreme. Should you cover your shorts at this point?

Had it been a sell-off, u should have squared the shorts here.

But this has been a small rally.

What's the difference between a rally and a sell-off?

Sell-off is generally straight line, rally is a stepped fall or rise.

since this fall has been a rally (though small), u r likely to see a divergence between rsi and nifty before the rise starts again.

so, hold your shorts till that point.

That point comes at C when rsi is rising and nifty is falling (divergence).

Cover shorts here (profit of 70 points) and initiate fresh long position.

========

At X, rsi touches the higher extreme.

Should we square off long here?

But, as mentioned in case of point A, we are not sure whether the nifty may rally further.

so, here again we will square-off at the lower high during retreat (rsi already having touched the upper extreme).

Our "hold" decision proves good when we see the rsi falling but the nifty holding on.

This is a clear signal that rsi is making space for nifty ot climb further.

Then the nifty climbs to D.

So should we now unwind longs at D?

Again, we don't know whether nifty will rally even further.

(Although there is clear divergence between rsi and nifty. rsi has fallen, nifty has climbed)

However, we wait.

But the nifty falls and we unwind longs at Y (lower high) and go short.

(profit in this 2nd leg = 100 points, total profit so far in around 15 days = 170)

=================

We get some anxious moments when nifty climbs to Z after the william%r gives buy signal at J.

We hold the shorts with stop loss equal to height of D (anticipating double top).

Fortunately, nifty starts falling after Z all the way to E.

Notice that this fall is straight and not stepped, meaning thereby that this is a sell-off and not a rally.

This means that divergence is unlikely to happen between rsi adn nifty (as i mentioned earlier, divergence happens after rally and not sell-off)

So we cover shorts at E (profit in this 3rd leg=100 points, total profit so far in around 3 weeks= 270) and initiate fresh longs.

Notice that we have been always in the market, just like SAR.

We have been going long immediately when we cover shorts

and go short immediately when we unwind longs!

This milks the market to max!

=================

At F, rsi reaches near upper extreme and we unwind our longs as this is not a rally but a sharp buy-in (as the rise is straight and not stepped).

We unwind our longs and intiate fresh short.

Profit in this 4th leg = 60 points. total profit till now = 330 points.

=================

Nifty then falls to G when rsi reaches lower extreme.

Notice that william%R is always confirming the right points of buying and selling.

We cover shorts at G and initiate fresh longs.

Profit in this 5th leg = 50. Total profits so far in around 20 days = 380.

=================

From here rsi rises till nifty reaches H.

Since this has not been a straight rise but a stepped one, we should be expecting divergence to appear between rsi and nifty.

so we hold the longs.

Profit so far in this 6th leg =120 points.

total profit in 1 month since start of this analyses = 500.

For one lot this would have given Rs.25000/-.

=================

We have milked the market fluctuation to the max while always being in the market, using rsi supported by william%r.

Profit by chance!

What is the probability of heads in a coin toss?

50% (because there is just 2 options - head and tell)

If you were to bet repeatedly on 'head' you will be winning approx. 50% of the time!

If it rains for 70 days in 100 days of monsoon what is the chance of it raining on any day in those 100 days?

70%.

If you were to bet in favour of rain day after day in those days, you will be winning 70% of the time!

If Sachin makes a half-century 8 times in every 10 innings he plays, what is the chance of his hitting a half-century in the next inning?

80%

If you were to bet on his half-century, you will be winning 80% of the time!

If the stock turns down 8 out of 10 times when the rsi on 1 month chart hits 85, what is the chance of the stock turning down next time the rsi hits 85?

80%

If you were to bet on the shorting position every time rsi on 1 month hits 85, you will be winning 80% of the time.

If for the balance 20% trades you have strict stop loss, you don't even lose!!

Trading is a probability game.

Trading is taking high-probability chances!

Nothing is sure!

But chances of certain things at certain times (expecially extremes) are very high.

For good traders, trading is nothing but taking those chances

coolly and boldly

with a smile!

And when they lose, they are happier!

Because they know that the odds of profiting just improved!

When u miss the train...

Afraid of missing the train of the new trend about to start?

And thus losing when the new trend doesn't start immediately when u enter, rather the old one is still continuing?

Just like the Bank nifty where correction hasn't started as yet despite the indicators suggesting that it is severely over bought as of now (17th Aug 2010 closing)!

While there is no way to exactly pin point the start of the new trend when indicators are hinting

here is a simple way to avoid the pitfall of jumping into the trade, expecting the new trend, too early!

"When the new trend finally and mercifully starts

and if you are not on it

don't worry

it will retreat a good distance to pick you up."

This way you will not lose the train of the next trend except for a few yards!

e.g. just have a look at the CNX IT chart for 1 month. Here you will notice that from 12.30noon 14th Aug'2010 till 2pm the next day, both rsi as well as william%R were at overbought extremes and you could have erroneously and prematurely entered the short trade much earlier anticipating the down move.

Here, if you were to go as explained above,

though u would have seemingly missed the train at 2 pm on 15th Aug, it would have retreated

to pick u up at around 12.30pm on 16th Aug with hardly any loss of opportunity.

Also, note that by that time both rsi and william%R have started on the new journey (which incidently ended at 9.30am on Aug12th when both rsi and William%R met again at the other extreme.

So, when you missed the train of the new train, don't worry!

Just walk a few steps forward and expect the train to retreat to pick its most valuable commuter...

You!!!

Do this to boost profits & choke losses!

In case of an up rally,

say "No" to shorting indications such as RSI crossing 85 or even more!

say "Yes" to any indication to go long without a hitch such as RSI falling to 40-30-20!

Going short at every high bend inside an up rally can be dangerous and very less profitable.

Going long at every low bend inside an up rally can be least dangerous and highly profitable.

In case of a down rally,

say "No" to all indications to go long such as RSI falling below 15 or even more!

say "Yes" to any indication to go short without a hitch such as RSI rising to 50-60-70!

Going long at every low bend inside a down rally can be dangerous and very less profitable.

Going short at every high bend inside an up rally can be least dangerous and highly profitable.

In case of a range-bound movement,

say "Yes" to all indications to go long or short without a hitch!

Follow this simple but magical advice and your profits will double and losses will become quarter of whatever they are as of now!

Happy Trading!

Gambling is not good but.....

Gambling is not good

but if you must

then do it when the odds are extremely in your favour.

In fact, this would mean that though it is blind, it is not gambling.

It is quite safe!

So, how do I do it?

When RSI on 1 month chart (RSI 14/30min) is 95 or above I short huge huge quantity, and

When RSI on 1 month chart (RSI 14/30min) is 5 or below I buy huge huge quantity.

Sometimes I relax the limit to 93 on upper side and 7 on lower side.

I dare this on 1 day chart as well (RSI 14/2min) though with care.

And mind you, don't wait too much before you book profit.

I get such an opportunity atleast once a week, and the rewards are good for the entire week!

This is basically a small-movement-high-volume quick "pick and run" thriller!

The risk is absolutely minimum and reward is almost confirmed, and high too (thanks to high volumes).

Statutory warnings :

Bet to safe extent. Exit if unexpected happens. This is not a advice or recommendation. This is just sharing what I do for big thrill and decent money. Understand the risk before trading.

Life lessons from RSI

* you can't keep a good man down for long

* a bad man can't keep himself up for long.

* no thing or situation can remain in highly excited state for long.

* no thing or situation can remain in highly depressed state for long.

* if things are good due to some genuine reason, expect them to get better to the extreme unless there is a change in the fundamental realities.

* if things are bad due to some genuine reason, expect them to get worse to the extreme unless there is a change in the fundamental realities.

* any highly excited state is unsustainable and unstable and is an opportunity.

* any highly depressed state is unsustainable and unstable and is an opportunity.

* before jumping into any extreme situation, wait. the biggest sting comes just before reversal.

* any wave of situation, emotional, financial, social, physical, political etc. is likely to continue till it reaches an extreme, and then it recedes.

* while receding, the situation is likely to retest and retry to regain its earlier heightened state atleast once.

* if it fails to regain it, the situation is surely dying.

* if any heightened situation remains constant but perception of the participants starts receding, it is a pause before the continuation of the severe situation.

* if the situation is improving but the perception is worsening, or when the situation is worsening but the perception is improving, the situation is likely to reverse soon.

* any situation is likely to pause or reverse at its extreme.

* excess of everything is "bad"

RSI-SMA double-trap technique

For those who find applying RSI difficult, try the following technique

When price on 1month chart (Google finance) cuts SMA 34 line

a) from above, short till RSI 14/30min on 1 month chart touches 20

b) from below, long till RSI 14/30min on 1 month chart touches 80

Stop loss: When price whipsaws to cut 34 SMA again.

Pl note:- "cutting" includes the crossover due to gap up or gap down

One RSI, Two Rubber bands!

Here is an easy way to understand RSI and its effect on price!

Imagine two tight rubber bands are tied horizontally on the rsi chart.

one, along 0 rsi level

and the other along 100 rsi level.

The rsi is tied to both these rubber bands.

Also, the rsi can only move within these 2 rubber band boundaries!

Now, whenever the market sentiment,liquidity and/or fundamentals whip the bulls,

the price starts shooting up.

Along with the price, rsi also starts moving up.

When rsi moves up, the lower rubber band attached to its body starts getting stretched!

More the price moves up, more the rubber band stretches!

Stretch, stretch,.....more stretch!

Only the force of the trend keeps the price attached to rubberband rsi from snapping back!

It is easier for the market forces to stretch the rsi rubber band from 50 to 60 than from 60 to 70.

Stretch from 70 to 80 requires more force and momentum.

Stretch from 80 to 90 is very tiring!

Beyond 90 is anybody's guess!!

Degree of momentum required to stretch the rsi for next 10 points is always higher than the last 10 points!

The more the rsi rubberband is stretched, the more dificult it becomes to stretch it further.

And easier it is to snap back!

This increasing difficulty of stretching the rsi rubber band is because of many reasons

One of them is that the bears are just looking for a chance to call bulls' bluff and make money!

Also, with every rise in price, the greed starts making way for the fear!

The same thing is available now for higher price and hence lesser enthusiasm.

The momentum slows, the volumes drop.

Nobody, including sensible bulls wants to overdo!

Consequently, we see the rubber band rsi pull back.

RSI tries to pull back the price with it.

How much the price retreats depends upon the momentum left in the sentiment, liquidity and fundamentals!

Once the rubberband rsi takes a few steps back, it is now less stretched.

It is now ready to take the next stretch! Provided market forces have not exhausted.

This cycle of stretching and relaxing continues till all reasons with sentiment, liquidity and fundamentals are finished!

Then this rubber band gets the chance it was looking for....

and pulls back with vengeance!

Along with it comes down the price!

Now the sentiments, liquidity and fundamentals take the other side.

The same earlier story is repeated, albeit in the reverse direction.

But remember, the elasticity and hence the stretching the 14/2min rubberband is much easier than 14/30min which is further easier than that of 14/1day!

That is why, when RSI 14/30min rsi rubberband is stretched to, say 7, it is less easier to stretch it further and easier for it to snap back - less or more!

Now you can understand the reason behind "failure swing point" when the rsi makes a lower second peak and hence fails to "hold" its stretch thus resulting into snapback (trend-reversal)!

Almost any rsi pattern and behaviour can be understood with this rubber band analogy!

So, predict the movement of the price with the stretch and behaviour of the rsi rubberband!

Dr.Elango's RSI dilemma

My Mudraa friend Dr.Elango called me a short while ago to share a genuine dilemma with me.

"Jagmohanji, at present nifty is at 4835.

RSI 14/30min on 1 month chart is at 7.

According to what I have learnt, Nifty shouldn't be falling much from here.

But many of my friends are saying that if Nifty falls below 4830 then it will fall big!

Both these statements seem contradictory."

Well, Dr.Elango's dilemma was right as well as wrong.

Right, because 4830 was crucial support!

Right, also because, nifty had room between 7 and 0 to fall even more!

Wrong, because when rsi on 1month (and not intraday, mind you) is at 7, it is quite an oversold position already!!

Though, to fall from this already oversold position is not impossible, that fall has to be quite low.

Even if it isn't that low (due to panic situation), the force causing that fall has to be Mammoth!!

Besides, the spring back will be equally swift!

I told Dr.Elango that in my opinion RSI 3month chart (14/1day) indicated that we might see 4700-4750 levels also.

But (and that is a big 'But')

RSI has to climb to upto 15-25 on 1 month chart to make some room for more fall.

So, in my opinion, nifty can't fall "huge" from current "considerably oversold" levels "Today"!

It can fall that much "Tomorrow" provided RSI climbs before market close today and makes way for that fall!

Otherwise, either "big" gap-down opening tomorrow is not possible

or

The pull back will be dramatic!

RSI - rocket behind the price!

Everyone knows RSI.

But very few benefitted from it!

Why?

Because, as Aristotle once said

"Nobody loves the man whom he fears!"

People fear RSI - so they don't love it!

Why do they fear RSI?

Well, what else can they do when they got their fingers burnt while trading with RSI!

RSI is one of the first technical indicators every new trader studies when he/she starts trading

Also, RSI is one of the first technical indicators he/she tries

Initially it seems to work but very soon "it" lands you in wrong or too premature trade!

Why does this happen?

Why do they burn their fingers?

Well because they got the meaning of RSI totally wrong!

How?

Well they always thought RSI was "Oversold" or "Overbought" indicator!

That is wrong!

Price can continue to rise much after rsi hits "Overbought" territory!

Similarly, price can continue to fall much after rsi hits "Oversold" territory!

Rather, much of the action takes place in the "over" zones!

So?

What really does RSI indicate if not "overbought" or "oversold"??

Well, it is basically a momentum indicator!

It tells you the force behind the price movement!

It tells you how much thrust is left in the rocket to keep moving till it starts to fall under gravity!

That is why I say that if price retreats much less than rsi, then price has lot of fizz left in it!

That is why "failure swing point" indicates that the berlin wall is about to collapse!

..and so on

In the words of Cho Sing Kum

"For many people the very reason they learn Technical Analysis is the blind obsession of only wanting to know when to buy buy buy and when to sell sell sell. Nothing else is important to them. This group of people, they will fail repeatedly. For with this blindness, this ignorance, they will never be bothered to understand the mathematics, what they measure, how they behave, basically the original intention and interpretation of the indicators.The Relative Strength Index is never an overbought/oversold indicator."

Momentum can explain almost all the behavioural tantrums of rsi and hence that of the price!

"Oversold" & "Overbought" can probably explain none!

Always take rsi as the rocket behind the price.

This will help you understand the price movement very clearly!

The behaviour of the rocket hints about the movement of the "shuttle columbia".

Things to look for in price-rsi charts

1) Where is rsi standing?

= whether near 85 or 15? If they are beyond 85 or 15 and still moving, they are stretching the rubber band which is likely to rebound sooner or later!

2) How much (of this stretch) is too much?

= there are three stages of this stretch of rsi in the over"done" territory

a) both rsi and price rising

b) rsi flat, price rising

c) rsi falling, price rising

After this 3rd stage, the rubber of the catapult hits back!

Somtimes, stage c is skipped if momentum is medium!

3) Is price listening to rsi?

= When rsi retreats say 3 steps, does the price retreat 0,1,2,3 steps? Or is it that price is moving altogether in opposite direction!!

If price is retreating too less or not retreating at all, it is in no mood to hold rsi's finger and follow blindly!

Difference of opinion of two partners signals everything!

4) Are rsi and price on work or on a picnic?

= If rsi is ranging between 75 and 25, both are on a picnic, otherwise they have a task to do / train to catch / dog behind them!

A rally is serious work, ranging is picnic.

5) Are they parting ways?

= When rsi and price have an internal fight, they give sufficient signals. Look for "divergence" and "failure swing point". No journey ends till then.

6) Are they serious?

= If the overall trend is up and both rsi and price are moving down, their march is not serious! It is a buy on dip season! Vice-versa for other situation.