Speaker 1: Continuing on in session seven, we're now going to move to the crisp

values. In the back of your book is a handout with a clip on it. It's a data
printout covering two, it has two sections, 20 periods of data in each section.

There's nothing magical about the 20 periods other than the fact that I could get
two sections with 20 periods each on the same page and still leave you some room at
the bottom. Chris, if you look at the mini letter I gave you, this actually came
off the CopyTrack website. Not CopyTrack, but Stratagem, where I write the
commentaries.

I wrote a page for just a general overview of the crisp values. Chris, as you see
at the top of that explanation, I actually named this one after my son Christopher.
CHRIS, current health as a relative index of strengths.

I'm indexing plus 5's down to minus 5's. Christopher and I were kidding about it
and I said, I could call it Christopher. He said, what are you going to add to it?
I said, well, current health as a relative index of strengths towards optimizing
probabilities higher for entry and exit or entry and reverse.

I said, but I think we're going to keep it at Chris. In the money spread section,
and this is why it's good to put the two sessions together, the money spreads and
the crisp values. In the money spreads, we talked about moving averages on CFG and
moving averages on RSI.

We covered 20-period exponential on CFG against 20 on RSI, 45 on CFG exponential,

and 45 exponential on RSI. When the 20 on CFG was greater than the 20 on RSI and
the 45 on CFG was greater than the 45 on RSI, we said that both money spreads were
up. In the 5-2 values, when I put Chris together, the section where it's either
plus 2 or minus 2 are the direction of the money spreads.

The 20s are the shorter term, the 45s are the longer term. If both are up, like we
did with moving averages on RSI and close, if both of them are positive, the 20 on
CFG greater than the 20 on RSI and the 45 on CFG greater than the 45 on RSI, it
would be a plus 1 for each one of them, so you'd have a plus 2. If they were both
negative where the respective CFGs were below their RSI's, it would be two minuses,
giving you the minus 2. So the 20-period set becomes a short term, the 45 set
becomes a longer term. So if they were both down, in other words, the two 45 CFGs
were, the 45 on CFG was below the RSI, 45 and the CFG 20 was below the RSI 20,
you'd have minus 1 and minus 1, each as separate values. So you'd have 2, a minus 2
total, minus 1 for the 20s, minus 1 for the 45s.

Since the 20 is a shorter term, moving average period that we're applying, when
that 20 on CFG goes above the 45 on, excuse me, the 20 on CFG goes above the 20 on
RSI and it turns positive. Then your short-term money spread is turning up, but
your long-term money spread can still be negative and be a minus 1. I like to look
at it not so much as one canceling the other, where a lot of technical tools when
they write them and say, well, the short-term indicator's turned plus, the long-
term indicator's still minus, so it's a neutral.

I like to trade in the direction of what the major trend is, but I like to know
what the short-term indication is. So if both were down and the 20 on CFG went
above the 20 on RSI, that one would change to a plus 1. So when I express the
number as a minus 5 Chris value with the money spread value being plus 1, long-term
is still down, but going to a plus 1 says the short-term is turned up. Then when
the 45 on CFG crosses above the 45 on RSI, it holds also 1, so now we're at a plus
2. So if both of them were still positive, the 20 on CFG above the 20 on RSI, the
45 CFG above the 45 on RSI, you'd have a plus 1 and a plus 1, and your Chris value
could be plus 5, plus 2. But when that 20 money spread goes negative, it becomes a
plus 5 minus 1, because the short-term is told me it's down.
If it doesn't go to minus 2, it might just be a little blip and turn back up. Now
the Chris values themselves, I put this in here, proprietary trading tool, trading
model or tool, reading right from the letter I wrote to the traders, or to those on
the website, those on the service, those I write for. Based upon indicators taught
in advanced level of course. Well this is the advanced level, basically. The edge,
because I did not teach money spreads in the regular advanced course.

That's why I gave this a different number or name as the edge. While it could be
employed as a black box system, we prefer to use Chris as a technical tool for
monitoring trends. Everything that we've gone through in the edge, when I say if
you get a positive and the money spreads turn positive, and everything comes
together with the price support line on close, and if it's a plus 5, plus 2, you're
pretty much in the catbird seat. Trend analysis helps to identify direction of
trend. Chris values show where the market is in relation to and with respect to the
market's overall trend. You have a plus 5 value, which is max on the upside.

The moving averages of RSI and close, which are incorporated into the Chris value,
along with the other moving averages on CFG, RSI, and the SMA3 are also
incorporated. So that number, when it goes up to a plus five, tells you the trend
is probably turned. Normally when a trend is trying to turn, you get a sharp
reaction. If a market's been going down, these crisp values may start to turn and
go up to a plus five. From after being down, they'll turn quickly. But when they
turn, you usually get a reaction opposite. It gets a little overbought, sells off.
You should see a positive. The positive shows up with the plus five. Now you know
you're in gear.

But once the move starts, it can stay in force for a while. I saw the crisp values
on hogs. When hogs were at 57 cents, go from 57 to 37, a 20-cent drop in price over
the course of about six months. Every single night when I calculated the crisp
values, they were at minus five. When I looked at the money spreads at the same
night, they were at a minus two.

So as far as trend followers, as far as one of the real secrets, are you going to
tell us a secret? You get a plus five, plus two, you get an uptrend. You get a
minus five, minus two, you get a downtrend. If price action and volatility and
markets all over the place and the numbers still at a minus five, that's fine.
Still down. If it's still the plus five, we're still up. Second paragraph. Crisp
values express in two parts or two numbers such as either plus five, plus two, or
minus five, minus two.

And I mentioned this during the sessions. First numbers, intermediate to long-term
trend. Second numbers, more for the short term. Next, you have a crisp range from a
minus five up to a plus five. Market trend is considered to have changed when the
crisp has moved from one extreme to the other. The new trend is viewed as the
current trend until which point the crisp value has again moved to the opposite
extreme. So when you go plus five, plus two, you're up until you see minus five,
minus two.

As a trend monitoring, quote, black box system. If you see a plus five, plus two,
and that RSI is not above 60, and you're up against the top end of that 90-day
trading band with 6% moving average above it, or the 90-day moving average and plus
a 6% ban, you're extremely overdone. Maybe that started to fall off. Maybe the CFG
is not getting as high as it was on the chart before. Maybe hourly charts are
saying we're seeing negative reversals or range shifts, and you're starting to see
evidence of range shift, even if the crisp is at a plus five. You don't necessarily
have to wait until it goes to a minus five. But I'm saying as far as an overall
perspective of overall trend and monitoring that trend, as long as it's plus five,
you should be seeing positive, and it's minus five, you should see negatives. So
you can use it in conjunction with the basics of pattern recognition for positive
and negative reversals.

And that's where that next paragraph was. Once a market, for example, has moved to
a reading plus five, plus two, trend considered up, it will then be viewed as up
until a reading of minus five, minus two. We can get up to a plus five and sell
back to a zero, never go to a minus five, get a positive reversal signal, kick it
in again, and then go back up to a plus five. I've seen it sell down to a minus
three, and kick in a positive and turn back up. And it'll kick in a positive, go
up, sell off into another positive, and the second positive shows up as a zero.
Then a rally and a sell off, and then it's back to a plus three and back to a plus
five and stays plus five for a while. Crude oil has been plus five since $20.

It's now at 25 and a half. Bonds were at minus three, I believe, minus three or
minus five when we kept banging on that bond chart up at the 60 level at 103 and a
half. Then there was like a minus three, it went to a minus five, minus two, and
it's been that way every single day for the last three weeks. If price action, your
next paragraph, price action of a market starts to correct or retrace the shorter
value may correct from a plus two or a plus one or even down to a minus one or a
minus two. You'll see evidence where you can be a plus five with a minus two
because the money spreads are negative. Long-term value may also correct from a
plus three, zero, or even a minus three. Even though price action and crisp values
are declining, it's not until the values reach minus five, should have been minus
five, minus two, and just, you know, the trend is still, is then considered to
reversed. But take everything that we've gone through in the courses, the basic,
and also in the edge, and look at chart analysis and then figure out where the
crisp values are. A drop in crisp to minus from a plus five, plus two to a plus
three, minus two, or even minus three, minus two suggests a correction in the
ongoing trend. During a corrective rally in a downtrend, crisp could move from
minus five up to a minus three, plus two, or even a plus three, plus two. So it's
not really until it hits the opposite extreme that you feel it's really long-term,
and I say long-term with respect to a trend for eight weeks, 12 weeks. I've put
trades on, remember a couple of years ago, I did a CMBC, it wasn't CMBC, it was
Financial News Network, went short gold in February, and got out in June.

And I think it was from like 425, 430 all the way down to 350. And every week,
leave a gift on Financial News Network, which say, Andrew, are we still short gold,
Sharpe? I didn't have crisp back then. But that's the way I view a trend. As long
as it's moving, I'm staying with it.

And I let the market show me what they're going to do. Crisp values determine daily
based on the indicators, moving averages calculated at the end of the day closing
price. Once an uptrend, plus five, plus two, or downtrend, minus five, minus two
has been discerned in terms of crisp value, we then watch for positives and
negatives. With respect to crisp values, we should see positives with plus five,
plus five, plus two readings and negatives with minus five, minus two. A value of
plus five, plus two, or minus five, minus two with the close each and every day for
weeks helps us to confirm, or excuse me, helps to identify strongly trending
markets and stay with the position longer. Combining crisp values, range rules,
positive and negative rear arsals also helps to identify the larger trend moves and
additional entry points along the way. Crisp values are about as high as the
average. black box is just I want to get.

One thing that I do have that I would put in a black box system is the 9 and 45 on
close and RSI, the original guidelines which I've used for the last 15, 17, what 20
something years? God, I'm getting old. That's something that's never changed for
me. 9 and 45 on closing price, yes, is a little more heavily weighted than the 9
and 45 on RSI, but when they're both pointing in the same direction, you don't
question it. Your next page, Chris values an objective and quantitative quote trend
model. As I've pointed, as I mentioned previously, I've seen markets start in an
uptrend and day plus five plus two for months and never change in that market. Go
up, retrace, go up, retrace, go up, retrace.

Like we were talking about how do you define momentum highs or lows relative to how
many periods you look back? As long as I'm seeing a plus five reading, I'm viewing
it as an up. If I'm seeing a plus five plus two telling me both money spreads are
up, then it should be a strong up. Intermediate to long term, the first plus five.

On your left-hand side of the page, you see plus five up on the right side minus
five down. Broken excuse me. Close RSI, RSI, DFG, SMA3. Left-hand side, SMA9
greater than E45, E, simple greater than exponential.

Simple nine greater than exponential 45 on close. That should be a plus one. You
can put a plus one beside it. SMA9 greater than EMA45 on RSI.

That would be a plus one. That's the way I did it. I broke it into sections. You
can draw a line actually under SMA9 greater than EMA45 because that's the first
part of the equation. In the very, very basic course, we use guidelines of RSI
moving averages up, close moving averages up, or plus one. RSI moving averages
down, closing price moving averages still up, or side up. If both are up, 9 and 45
on close, 9 and 45 on RSI. If they're both pointing up, it's a plus two. Plus one
for each one of them. If the close price moving averages are up and the RSI moving
averages are down, from our basic course, it's side up.

It's plus one. Moving averages on RSI are down, but close moving averages are up.
We're giving more weight to the close moving averages. It's not like plus one and
minus one. It's just a plus one. If both close and moving averages are up, it's a
plus two. Where we had the moving averages on RSI down and the moving averages on
close down, then it becomes minus two, one for each level. But if moving averages
on close, 9's below 45, it's a minus one. The moving averages on RSI are up. It's
not really a plus one because the trend analysis guidelines say RSI moving averages
up, closing price moving averages down.

Let me restate that. If the 9 and 45 on close are down and the RSI moving averages
are down, it's minus two. But if your moving averages on close are down and your
moving averages on RSI are up, then it's side down. Remember we had up, side up,
side down, and down.

So in the case where your moving averages are up, but your closing price moving
averages are down, it's side down, which means it's minus one. So the first part of
the Chris equation, I actually take those 9 and 45s and figure out what those
guidelines are. The second part, EMA 45 of RSI, when you're left-hand column, the
third line down, EMA 45 RSI greater than 50. Simple, straightforward, greater than
50 plus one. Next line, EMA 45 of CFG greater than 50 plus one. Last one, we had
talked about using the SMA 3 and how I put a simple or an exponential 20 on that
SMA 3 to smooth the volatility of the SMA 3. 20 period exponential of the SMA 3
greater than 50. The reason I broke it down is the original work that I did was 9
and 45s were up and the EMA 45, 9 and 45 on close, 9 and 45 on RSI, EMA 45 on CFG
and SMA 3.

Just to recap, looking at the left side, you've got to break the 9 and 45 on RSI
and the 9 and 45 on close as one section. It's going to give you a value. It's
going to be either plus two, plus one, minus one, or minus two.

They're the only four you can have. The second part was the EMA 45 on RSI greater
than 50, EMA 45 on CFG greater than 50, and the EMA 20 done on the SMA 3, which we
did on RSI 3. So when you go to calculate that EMA 20, you want to do a simple RSI
3 period and do a simple moving average of that to get your SMA 3 and then do a 20
on the SMA 3. The right side of the column is for a minus five.

Again, you're going to break those first two lines from the other three. SMA 9 on
close, below EMA 45 on close. Second line, SMA 9, of RSI less than the EMA45 of
RSI. If the moving averages are both down, it's a minus 2. They're both up, it's a
plus 2. If closed moving averages are up and RSI moving averages 9 and 45 are down,
it's side up.

That's the way we talked about trend originally. So it's a plus 1. If the closing
price moving averages and the RSI moving averages are both down, it's a minus 2. If
the closing price 9 and 45 are negative, but the RSI moving average 9 and 45 are
positive, it's a minus 1 because it's side down. The RSI moving averages, being
more sensitive, they're going to be up.

So you can, again, have either plus 2, plus 1, minus 1, or a minus 2. The second
section is the EMA45 of RSI is less than 50. Your next one, EMA45 of CFG, less than
50.

And your last one, EMA20 of the RSI, of the SMA3 that you did on the RSI3 is less
than 50. So for a down trend, you look at together minus 5, you would have to have
them in that order. The 9 on close, below 45 on close. The 9 on RSI below is 45.

The EMA45 of RSI below 50, of CFG below 50, and of the EMA20 done on the SMA3 all
below 50. For sake of simplicity, take it as it is presented there. If the 9's are
below their 45's, the 245's are below their 50's, and the 20's below 50's just
figure minus 1, minus 2, minus 3, minus 4, minus 5. The opposite for the left side
of the page, 9 and 45's on close, above 50 on RSI, I'm sorry, the 9 on close above
the 45 on close, plus 1, the 9 and 45, the 9 on RSI above the 45 on RSI, plus 1.
EMA45 of RSI above 50, plus 1. EMA45 of CFG above 50, plus 1.

EMA20 done on the SMA3 above 50, plus 1. So when you see them line up like that,
it's plus 1, plus 2, plus 3, plus 4, plus 5. All would be right with the world if
it went from minus 5 to plus 5. If it were that simple, if pictures didn't throw
curveballs, life would be simple. That's the straight approach, straight forward
approach.

Wait till I all line up. The more you work with it, the more you're going to see
how you can get these patterns to where it'll go from a plus 5, plus 2, and then
there's a little correction and it drops to a plus 3, or a plus 3 minus 2, because
the bottom half, the short and immediate trend, is the money spreads we talked
about. The 20 on CFG greater than left-hand side, lower left of the page. 20 on CFG
greater than 20 on RSI, 45 on CFG greater than 45 on RSI. So if the whole left side
lined up, plus 5, plus 2, you'd see every value exactly the way it's presented
there. When a market gets a little bit ahead of itself, and people take profits and
it corrects a bit, you might see a reading of plus 5 minus 2, because the short-
term money spreads turn down a little bit. But if they turn down, you see a
positive in your 945 on close, and you're 945 on RSI, and your 45 is both on CFG,
and RSI is still up, and the 20 is still up, then you got a plus 5 minus 2.
Probably short-term correction. The interplay between the 9 and 45s on close and
RSI, you guys have worked with, students have worked, they've taken the course for
years.

Those values don't change, because there, if anything, anything I do is chiseled in

stone, it's that. As long as you follow the guidelines for moving averages on price
and moving averages on RSI, you should at least stay out of trouble. We saw from
charts we went through, we saw them turn down back in mid to late July. Actually,
on the shorter term, using shorter term moving averages on price and RSI, they
turned down early July. But there's no way you would have been caught in a major
market collapse, like a lot of people were using just the guidelines for the 9 and
45s. You would have seen the trend was starting to turn lower, and at least
protected yourself. Where it gets dicey, a little dicey, is when the market starts
to move around, and those crisp values change. A point I want to make also is the
fact that while I am in the process of working with Jim on computerizing this whole
thing, I still do them by hand, and I showed you the spreadsheets.

The handout that we're going to work from now is in the back of your book where it
has the columns, the values of the indicators that we've used throughout the course
and in the edge. What Jim and I are working on and trying to computerize to make
the quote black box, and the reason I don't want to call it a black box, is if
you've ever traded with a black box system. If the black box ever falls apart, you
don't know how to fix it. Most black boxes, programmers that write those computer
programs you can buy the software. You can buy the list of programming or the list
of signals in the case of the crisp values. I publish them in the service. I
calculate them.

I talk about them all the time. Gold is now at a plus five, so we should see higher
prices. Those that have taken the courses and going through the edge know how to
calculate. I will show you how to calculate.

I have. I'm going to show you a couple of variations to get a little goofy. When
they get goofy, it's not that there's anything wrong with it. It's just market
volatility has made it move one way or the other.

Short term at least. And when a computer does it, it's a condition statement either
or. It's got to be plus or it's got to be minus. If you have three variables, now
here we talked about, look at the left side.

For a market that's up to nine and 45 on closer up and the nine and 45 on our side,
simple, straightforward. concrete conditional statement. Both 9 and 45 have to be
up for it to be a plus 2. Both have to be down for it to be a minus 2. We talked
about side up and side down. Side up is a plus 1. Side down is a minus 1.

That's fine with two variables, but when you put 3 in the mix, you can get all
kinds of combinations. You can get a CFG45 above 50. You could have a CF, excuse
me, a 45 on RSI above 50, and you could have a simple moving average 3, the E20 of
that SMA3 below 50. Now you've got two plus, two of them being above 50 and one
being below 50. So now you have two pluses and a minus.

A little plus and a minus would cancel, and you still have a plus 1 added to, if
your 9 and 45s were set to a plus 2, you'd be a plus 3. Now let's look at the next
page. The first page, your handout, is on the back of your book. I thought I had
this in spreadsheet. Well, when I handed out with a tabular listing, as we said, 20
periods, broken into two sections. The first section, you should see a Dow Jones
chart, it's Dow Jones data. The first column has a date, and in the edge, we
covered the 13 high, the 13 low, the 65 high, and the 65 of low. So you have price
reference points. So let's label columns.

At the top, we're going to the next one. S9 RSI, simple moving average, 9 periods
of RSI 14. That's column 1. Next to that, E45 of RSI, column 2. Next to that,
simple 9 on close, column 3. E45 on close, column 4. The 9 and 45 on RSI and the 9
and 45 on close price are those four columns.

You know the interplay from your basic course. We reviewed it. The 9 above, 45,
they're up, the 9's below, the respective 45's, it's down. The bottom section, we
have the date, close, RSI 14, SMA 3. Now I put it in there as SMA 3, but if you
want to make a note on it, I'm used to what I have to do in it so long, that SMA 3
is the SMA 3 of the RSI 3.
I only had so many columns to work with, and I had to drop certain things to make
room for others. The next column after SMA 3 is CFG. You can see there when I first
put it in, we used to call it the CFG mode.

It's just a straight CFG value. We're going to go back to the column 4. The next
column after CFG is CFG, exponential 45 period moving average. That's column 6.
Column 7, RSI exponential 45.

It's the 45 period moving average on the RSI 14. That's column 7. Column 8, E20
slash 3. That's the exponential 20 on the SMA 3. That's column 8.

Label that 8. Column 9, RSI, exponential 20. 20 period exponential moving average
on the RSI. The next column after that is close exponential 20. It's a 20 period on
close. I don't even label that.

We'll just skip that one for now. Last column on the right, CFG 20 exponential, or
see it, see it, exponential 20 period moving average on CFG. That's column 10.

To make it simple, let's start first with the easiest. Look at column 10 versus
column 9, exponential 20 on CFG against the exponential 20 on RSI. That's your 20
period money spread, your short-term money spread. 20 on CFG against 20 on RSI.
Column 6, CFG 45 against column 7 is your 45 money spread, your CFG against your
RSI. Now if you look at the bottom row, the CFG 20, column 10, the last input on
there is through the 20th, which I guess was last Wednesday. The reading is 65, 51
versus column 9's reading of 6.0 .84. The CFG 20 is greater than the RSI 20.

The short-term money spread is positive. Column
your bottom line data there, CFG 20 had a value
value in column 9, which is the RSI exponential
than the RSI 20, the short-term money spread we
Here you're looking at it as a tabular list.
10, do it again. The last input,
of 65, 51. That's greater than the
20 at 60.84. The CFG 20 is greater
have shown in the charts as a line.

The other money spread we used was the 45s. That's column 6, your 45 period moving
average on CFG against your 45 period moving average on RSI, which is column 7.
Column 6, the last data point at the bottom of that column is 62.49 versus the last
data point of column 7, 57.24. When you look at a chart, and when we were going
through the money spreads before, we had the 20 on CFG versus 20 on RSI. You saw it
as a line going across the chart.

This is the way you see it in a tabular set. where you have the data points. For
some people, it's easier to see the line. For other people, they want to see the
numbers. So that's how, when this prints out, I can look at the column 10 versus
column 8, excuse me, column 10 versus column 9, and say the 20 period money spread
is up. I can look at column 6 versus column 7 and say the 45 period money spread.

The longer term money spread is up. There's a lot of interplay that you can do
which you can take to 20 on CFG against the 45 on CFG you want. You can take the 20
on RSI against the 45 on RSI on your computers. You can plug in the different
relationship or different length moving averages. But this I like to do CFG against
RSI because that was the basis of the money spreads and it's also the basis of the
plus or minus 2 in the crisp values. If we go to the top section where we had
columns 1, 2, 3, and 4 labeled RSI 9, simple moving average 9 of RSI as column 1,
exponential moving average 45 of RSI as column 2, simple 9 on close, simple moving
average 9 on close is column 3, exponential moving average 45 on close is column 4.
If the 9 is above the 45, in our basic guidelines when we started way back in the
original courses, 9 on RSI greater than 45 on RSI and the 9 on close is greater
than the 45 on close, they're both saying that they're up respectively.

If you look at it in a number reference or number of relationship and look at your

last data point, column 1 there, that we've labeled one, not the date column, the
one we've labeled with SMA 9, 62, 48 versus 57, 24, and the column next to it, the
9 greater than the 45 on RSI. The next column is 9 on close, 10,586 versus 10,211.
Both 9s are above the respective 45s. So then the RSI moving averages 9 above 45,
close moving averages 9 above 45, trend is up, plus 1 for the 9 and 45 on RSI, plus
1 for the 9 and 45 on close.

That takes care of the top section. And when I print these out on a daily basis,
I'm not listing 20 periods of data every single day. I'm really only listing like
the last six.

The reason I last list only six. Remember we talk about signal counts, best signals
come two to five periods apart. You have your X point. If you make a momentum low
and start your count, that's your X. Next five days later, you might have a bullish
diversion.

You might have a positive reversal, but you can look back over the last six days to
see your X point, see what your count is. Here I listed 20 just so you can actually
take a look at how it's moved, how those moving averages have moved, as numbers as
opposed to lines. So if the 9 and 45s are both up, and I said these sections are
separate, when you look on a spreadsheet, or not the spreadsheet, but where we have
the Chris formulas.

The 9 and 45 on close and the 9 and 45 on RSI are those first two lines on that
formula page. You want them both up. 9 and 45, each one is up respectively.

It's separate. The number that you're going to get is either up, side, up, side,
down, or down. So it can only be plus two, plus one, minus one, or minus two.

Once you have that plus two, that's the first half of the Chris value. The second
half, the columns we marked at the bottom section, we had marked CFG 45 as column
six. RSI 45 is column seven. E20 on three is column eight.

Circle those three numbers because that's where the next part comes from. The
column six, seven, and eight that we had labeled for CFG 45 column six. RSI 45 for
column seven.

And E20 on three is column eight. It was pretty straightforward in the formula
section. All three of those values must be above 50. You look, the last data points
for each one, column six, 62, column seven, 57, and column eight, 62. All three of
those values are above 50. So it's plus one, plus one, and plus one.

And as I said, it's real simple to get to fives because it's straightforward. In
the upper section, if it were side up, where the moving averages on RSI were down,
but the moving averages on close were up, it would only be a plus one. If the
moving averages on close were down and the moving averages on RSI were up, it would
be a minus one.

And if both nines were below the respect of 45s, it would be a minus two. In the
bottom section, the interplay that you will see with column six, seven, and eight.
Column eight, the exponential 20 on three is so quick in relation to the RSI 45 or
even the CFG. When I showed the money spreads, we graphically drew, we showed the
graph with the lines for CFG 45, RSI 45, and SMA 345. The RSI 45 is the least
volatile.

The SMA 3 or the exponential 20 on three is the most volatile. So if all three of
these values of the end of column six, seven, and eight are all plus or greater
than 50, it would be plus one, plus one, and plus one. If they were all below 50,
they would be minuses. So you could have at extremes all three above it, which
would give you a total value of plus three for the bottom section, all three above
50 is a plus three. All three below 50 would give you a value of minus three. If
you had the case where the exponential 20 in the bottom section column 8, the
exponential 20 was below 50 and the other two were still above 50, then you'd have
two pluses and a minus, a plus and a minus would cancel, a plus, two pluses and a
minus would cancel to a plus one, two minuses and a plus would cancel or drop to a
minus one.

It gets a little tricky and I think even getting with some people trying to write
it in the program, I see things and I calculate the number and then when I'm
running on computer, it's not getting the same number. So we've still got a little
bit more work to do on it, but with my numbers, I mean when I do them with these
spreadsheets, I get so used to it, I just look at that bottom section, if all three
are above 50, it's plus three, if all two, and then go to the other section and see
whether it's tied up, but when you get these numbers, the bottom section, as I
said, if all three in this case, what we have here on the Dow Jones is it's plus
five. When you look at the money spreads that we've gone through, the 20 period
money spread spread is plus, the 45 period money spread is plus. You have the Dow
at plus five, plus two right now. That could be changing. And if it changes, the
first place you should see it is in the shortest term indicator you have, which
would be the money spread 20, the 20 period money spreads might go from a plus two
to only, might go from a plus two to a minus one because the 20 money spread will
turn negative first.

The nine and 45 on close will take a while. This lower section with the E20 on
three is the shortest indicator within this whole group that we're using to create
these numbers. If the E20 on three were minus, in the sense of below 50, it would
be a minus one, and if the 45 on CFG and the 45 on RSI were still above 50, you'd
have two pluses and a minus, which would reduce to a minus one. If the moving
average is on RSI turn down, good example, four pages over. Now I've given you,
your first page is Dow Jones, June futures. Second page is bonds, June.

Third page, I have two bond charts, there are bond lists here, the second bond. We
have one there on Microsoft. You look at the one on Microsoft data. The top part,
top chart, S9 RSI, that column is marked S9 RSI, remember, nine and 45 on RSI, and
we had called that columns one and two for the nine and 45 on RSI. Next to it, we
had the S9 on close, column three, column four, the E45 on close. Lower section,
right under the word Microsoft, the CFG MO 45, we called that column, no, CFG MO,
we called column five, CFG 45 moving average is six, RSI E45 was seven, E20 on
three was eight, RSI E20 was nine, we skipped the column and the last column on the
right was CFG 20.

Look at the data points in the top section as of the 20th, column one versus column
two. Simple nine on RSI, greater than 45 on RSI, that's a plus one. Simple nine on
close, 62, 22, 62, 24, that's tight. Nine is below 45, so that's a minus one. So
your moving averages on RSI are up, but your moving averages on close are down, and
look at that data point, we just turned down.

We're in the process of turning down. You look at the bottom on column six, seven
and eight circle, one big circle and include six, seven and eight because that's
your lower section, and that's what has to be calculated together. You see in the
bottom of column six, the CFG of 50.11, still above 50, and RSI 45, 47.23, below
50.

E20 on three, 49.70, below 50. So you have two down there that are minus, column
eight becomes a minus, the value at the end of column seven becomes a minus, and
the value at the end of column six or at the bottom of the column, the 50.11
becomes a plus one. And now you've got two minuses and a plus.
A plus and a minus would cancel leaving you a minus one. At the top, you had RSI
moving averages up, but closing price moving averages down, saying what? Side down,
because moving averages are up, close prices still down, side down would give you a
reading of minus one. If it were straight down, it could be a reading of minus two.
So your top value is a minus one, your bottom value is a minus one, so when you
look at Microsoft, it's actually a minus two.

And even the recent run up that we had in Microsoft, it has never gotten above a
plus three. That gives you the first part of the crisp number to the left of the
hash mark. Look at the CFG 20 versus the RSI 20. It's 52 versus 48, column eight,
excuse me, column 10 CFG 20 against the RSI 20. It's a positive.

It's a plus one because the CFG 20 is greater than the RSI 20. Now look at your
column six and column seven. Your 45 period money spread, 50 greater than 47. So
you've got minus, when your money spread, excuse me, plus on your 20 money spread
because the 20 is above the RSI 20. The CFG 20 is greater than the RSI 20.

And the CFG 45 is greater than the RSI 40. So they're both plus the number you
calculated from the lower portion of the chart of the table and you're moving
average guidelines for price for RSI and close where a minus one and the lower
portion was a minus one and a minus one giving you a minus two crisp with plus
money spreads. So you'd have a minus two for a crisp value and a plus two for money
spreads. Microsoft had never gotten above five on the last run up and sold off so I
think the lowest I saw on there was actually a minus five and it's rallied back up
on the recent rally till a minus two but it's still not even gotten back above
zero. But the minus two says the crisp value says the trend is down.

The money spreads say it's up. If you look at the RSI value lower section, bottom
section column three columns in RSI 14. That's your RSI 14 on close. I don't see
that above 60. It's not been above 60 so the range is still pretty much holding
resistance at 60. Price is where your price close resistance is. Look at March 5th
on that date at the bottom. A close of 6305, an RSI 14 of 5646, an SMA 3 of 88, a
CFG value the next column of 105.

So your CFG is way overbought. Your SMA 3 was well above 80. The numbers from that
day if you go further across the three columns 6, 7, and 8. 44.25, 4437, and 4636.
All three of the numbers in the lower part of the chart or lower section are below
50 for a minus three reading.

You go to the top part of the chart and look put a piece of paper or ruler right
along March 5th. RSI moving averages were down. Closing price moving averages were
down. Your three values in columns 6, 7, and 8 that day on the March 5th were all
three minus. So you were at minus five on March 5th where the close is 6305 on your
bottom section where your close price and your date are. Just right next to it,
minus five. Well Chris has been to a minus five and we've had a little bit of a
rally and all it's been able to do is get back near not even near zero yet.

The money spreads on the fifth. If you look at the columns, we're 49 on CFG versus
42 on RSI with the 20 values. That's plus one. And 44.25 and 44.37 minus one. So
that day we were at minus five and a plus one.

We never got to the CFG money spreads although they turned positive, the 45 money
spreads were still negative. I have tried to explain Chris values now before in
special sessions with people on the phone across the table with them. It takes a
lot of input because I have not written in a computer model yet. I just take it as
a spreadsheet and I have spreadsheets that I do by hand where every single day I
write the close price, the close price, the Chris value, the money spread value all
on the same page. This way I can keep a handle on whether it's changing on a
closing basis. And be able to see where it is in relation price and CFG.
Money spreads and also the five twos. But no matter how many times I've tried to
write it in computer, there's things that go through my head that I guess I'm not
telling the computer the right thing. Other people I've worked with on software
we've tried to computerize it to make it a model and we're still in the process of
doing it. The RSI edge is a level above and beyond what most people take in terms
of RSI. Most people think you can use bullish, bearish divergence.

It's a simple little oscillator. What we do in the edge is we take it what you've
learned in the basic courses to a higher level. What I have said I would do with
people in the edge courses.

For those who complete the edge course I'm going to have, as I said earlier, I'm
going to have a few supplements I'm going to send out. Anybody who goes to the RSI
edge course, we will forward to them for a couple months the Chris values in terms
of how I calculate them. When it's done in computer, I don't know how much longer
it's going to take, but my numbers are a little different than what we're seeing in
the initial computer studies. I have certain things that I do that I look at maybe
in my head that a computer doesn't understand. If I were to see 945s up and the 45
on RSI above 50 to 45 on CFG above 50, but the exponential 20 on 3 at a value of
like 50.01, I may fudge it a little in my mind where the computer has to wait to
see it.

It has to go below 50. But in my mind if you look, and this is why I do the 20
period list, where you look at the value on these different indicators over the
time, see the direction in which it's going. You'd see it on a graph when you throw
it on a chart. For the tabular listing, you can see the actual numbers and see if
they have reversed direction. The 20 on 3 is going to be the first one to turn in
the bottom section. The CFG 45 is going to be the second one to turn and the RSI 45
is going to be the third one to turn.

Chris is dynamic, Chris is powerful when it's all lined up, 5s, 2s. With what
you've got in the money section, money spread section, you can see it graphically.
What you have here, you have it in a spreadsheet format. You work with it, it'll be
dynamic. Thank you.