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The Linear Regression is the middle line of the Raff Regression Channel. This indicator forms a channel with trendlines extending from the high or low that is furthest from the Linear Regression. In the chart below, the Raff Regression Channel is shown with blue lines. The 31-January low is the high-low that is furthest from the Linear Regression. This low sets the distance for both channel lines (upper and lower). The thick green dotted line was drawn over the lower channel line and extended to mark rising channel support. QQQQ battled this extension for two weeks and then broke down with four consecutive closes below the trendline.
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What exactly is a Linear Regression? Without getting too technical, it is a statistical measure for the line of best fit. The red dots mark the closing prices. This Linear Regression is the line of best fit for closing prices from the November low to the February high. Notice how the Linear Regression cuts through these prices. With a clear break below the lower channel line, it is time to draw a new Raff Regression Channel from the February high.
Chart note: This chart was created by setting Chart Attributes/Type as HLC Bars and the Color as gray. A 1-day simple moving average was added with the Style set as dots and the Color red. A 1-day SMA is equal to the close and red dots provide a nice highlight.
