Used to forecast trend reversals. The rainbow oscillator is derivative from the rainbow indicator, using the HHV and LLV from the moving averages it creates an oscillator with bandwidth lines.
When the oscillator is between -50 and +50, this signals the trend is stable
When the band width become wider this signals that the trend may be continuing.
If the indicator travels above +50, it may be signalling instability and there may be a reversal.
If the indicator travels below -50, this implies that again there may be a reversal.