Composite Index
Elliott Wave Theory glossary · Core Axioms & Motive Wave Rules
Definition
An unbounded momentum oscillator developed by Constance Brown that embeds an RSI rate-of-change term inside the RSI formula and removes the 0--100 bounds, allowing it to continue making new highs (or lows) when RSI saturates above 70 or below 30. It is designed to detect divergences at Wave 3 and Wave 5 extremes that RSI alone misses because RSI flatlines at the boundary.
Composite Index in plain English
Momentum tools like RSI try to measure how 'overexcited' a price is, but RSI is squeezed onto a 0–100 scale, so once a market gets really hot it just pins at the top (above 70) and stops moving — like a thermometer that maxes out and can't show 'even hotter.' Constance Brown's Composite Index tears off those ceiling and floor limits and adds an extra term that tracks how fast RSI itself is changing, so it can keep climbing to fresh highs even when plain RSI is stuck. Traders care because that freedom lets it flash a warning (a 'divergence' — price making a new high while momentum secretly weakens) right at the powerful Wave 3 and Wave 5 turning points, exactly where a pinned RSI would show nothing.
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