As described in the May 2018 edition of Technical Analysis of Stocks & Commodities by John F. Ehlers. This indicators is an enhancement to the traditional RSI for detecting cyclical reverses.

This indicator has two settings:

• RSILength - This needs to be half the dominant cycle period. For example, if applying to stocks or stock indexes, the cycle period would be monthly (20 Bars on a daily chart) so you would set this variable to 10.
• Smooth - The smoothing parameter of the indicator to control volatile swings. This should be set to no more than the value of RSILength.

How to use this indicator in practice:

• If the indicator spikes below -2, this shows a high probability of a bullish reversal and is therefore a buy signal.
• If the indicator spikes above 2, this shows a high probability of a bearish reversal and is therefore a sell signal.

An example of this indicator is shown in the image below.