I have developed a new indicator that shows trend, momentum and overbought/oversold conditions at the same time. Its performance looks very promising and I am in the process of fine-tuning it.
The indicator is interpreted as follows: if it remains above the zero line it means that the trend is up. If it is rising that indicates momentum building up. If it fails to make a new high after a sharp rise this indicates an overbought condition amongst other things. In an analogous way, when it is below the zero line it means the trend is down. If it is falling that indicates downward pressure and momentum. If it fails to make a new low this indicates an oversold condition.
Below is an example for SPY (EOD data):
Below is an example for GLD (EOD data):
I will post updates on further development as well as signals it generates. This indicator may serve as a filter for the Price Action Lab patterns.