The Detrended Price Oscillator is a tool that smoothes the trend in prices, allowing you to more easily identify cycles and overbought/oversold levels.

If you think of long-term cycles as made up of a series of short-term cycles, then analyzing these shorter term components can be helpful in identifying major turning points.

Note that as the oscillator moves above and below the zero line, minor peaks in the DPO will usually coincide with minor peaks in price. Longer-term price trends are not reflected as the 20-day DPO removes cycles of more than 20 days.