TD REI

What is the TD Range Expansion Index (TD REI)?

The TD Range Expansion Index, usually shortened to TD REI, is a momentum oscillator created by Tom DeMark and described in his 1994 book The New Science of Technical Analysis. It measures the authority of range expansion: how decisively recent bars' highs and lows are pushing beyond the extremes of earlier bars, normalized into an oscillator that swings around zero between fixed bounds.

DeMark designed REI as an answer to a known failure of bounded oscillators: tools like RSI and the Stochastic Oscillator can stay pinned at an extreme through an entire strong trend, generating fade signals all the way. REI incorporates qualifying conditions intended to mute the reading when a move is too weak or too extended to be meaningful, so that extreme readings arrive less often and mean more.

Reading it follows oscillator convention with a DeMark twist: brief visits to an extreme are treated differently from persistent ones, and the study is meant to be consulted alongside price qualifiers rather than acted on mechanically. The Library leaves the specific zones and duration guidelines to DeMark's own materials, but the shape of the logic, stretched conditions plus confirmation, mirrors standard overbought/oversold practice.

How traders use it

• Trend-tolerant extremes: traders reach for REI where ordinary oscillators have burned them by pinning in trends, treating its extreme readings as more selective evidence of stretch.
• Divergence reads: a fresh price extreme that REI declines to match is read as fading expansion pressure, the same idea as a regular divergence but keyed to range rather than closes.
• Filtering other signals: a muted REI during an apparent breakout suggests the expansion lacks authority, prompting a wait for confirmation before committing.
• Construction cross-checks: comparing REI against a differently built gauge such as CCI helps separate genuine pressure shifts from artifacts of any single formula.

TD REI vs adjacent oscillators