When I first started using the 34 period EMA on the high, low, close…I called it the “34 period EMA on the high, low, close”. Catchy huh?
Fast forward a decade and I had to give this little set of moving averages a name for my first book. It was like trying to name a pet. You wanted it to reflect a little about who you are as the pet’s owner and reflect the uniqueness of the beloved little creature as well.
(Funny enough, since all my dogs have always been from the Broward Humane Society so I’ve never actually named any of my pets – unless fish count.)
I remembered that a student of mine was one of the reasons for my setting up the Wave. His name was Dave. I also thought of Dow Theory and the principle of different “waves” of participants and market phases. Toss that together with my love of the ocean ans surfing and *BAM!!* you have the Wave, the Dave Wave.
Through the years — and shockingly — these little moving averages have gained a tiny following. Questions arose: Are these like “Elliot Waves?”, “Bollinger Bands?”, “What do I do when prices trade inside the Dave Wave? Above? Below?” It slowly began to dawn on me that the “Wave”, because of it’s name never really described what it did!
Most importantly, the Wave is designed to help you identify which market cycle the market is in.
Secondarily, it identifies the strength of the trend and dynamic support and resistance.
So in an effort to clear up any confusion, I have decided to rename the Wave. Credit where credit is due: My students gave me a hand and we’ve settled on the “RCI”, Raghee’s Cycle Indicator. Honestly, I can’t say I like the name. And much like January 1st of a new year where you keep writing the prior year on your checks…I am probably going to keep calling the Wave the “Wwww-RCI” for a while. But the upside is that the name captures a little about me and the uniqueness of this trio of moving averages.
– Raghee