J. Welles Wilder Jr. developed the RSI, a popular oscillator that gauges the market's trend of strength or weakness.
RSI quantifies price momentum, and it depends solely on the changes in closing prices. Despite its name, it has nothing in common with the traditional relative strength concept, whereby the price of a stock is divided by a broad market index (such as Standard & Poor's 500 Index) to arrive at a ratio that shows the trend of a stock's performance relative to the general market. Instead, the RSI is actually a front-weighted price velocity ratio for only one item (a stock futures contract, or an index).
