RSI as leading indicator

While macro courses always refer to a traditional set of variables as being the only leading economic indicators considered, one of which is the stock market, we recently saw a leading indicator of the stock market. The $INDU chart shows the recent daily behavior of the Dow-Jones Industrial Average. Notice that a declining RSI that was occurring as the DJIA attained a higher peak. This BEARISH DIVERGENCE is a leading indicator of future stock price declines.