Analog Charts
CQG offers fourteen different charting styles. One I like to use for tracking the energy markets is the Analog Chart. This chart style allows you to overlay different markets on the same chart. In my example, I have heating oil (the blue line), gasoline (the red line), and crude oil (the black bars) all plotted on the same chart.
I use the line charts to track the closing prices of heating oil and gasoline. As the chart shows, I also plot the 14-bar relative strength study (RSI) for each of the three markets using the same colors. One of my pet theories is that there is a shift in the RSI reading due to the trend of the market. If the trend is up, then the RSI will close higher than 62 and not lower than 38 during declines before turning back up. If the trend is down, then the RSI will peak below 62 during rallies and close below 38.
I like to track all three markets, crude oil and the products using the above monitoring of the RSI for all three markets. Currently, the RSI readings for all three markets have turned up from above 38 and appear to be starting to close above 62, again. This is up trending momentum behavior.
Of course, as with all technical analysis, the market can turn on a dime due to news or other events that can shift traders’ attitudes. Still, looking at momentum readings with an understanding of the effect of the trend is often not addressed in the classic textbooks.
The Analog chart is an easy way to monitor multiple markets and associated studies.