RSI(2)<25 X6!

Today marks the sixth day in the row that the S&P 500’s RSI(2) value was under 25. Since Jan 1 2000, this has happened only 15 times prior to today. So I thought it would be fun to see what the forward return has been after these events. Here’s a handy spreadsheet. I calculated the forward return from the following day’s open to the close of either the 5th or 20th day. I.e. if you were trading based on today’s performance, you’d buy next Monday at open, and exit on Friday’s close (for the 5 day version). I haven’t included those pesky commissions in these numbers.

Screen Shot 2016-01-08 at 3.26.42 PMNote that only five of the 5-day periods were negative, and all but one turned positive over the 20-day period.

Should you buy on Monday? Is 15 data points enough? Is there an Easter Bunny? I can only answer two of those questions.

Easter Bunny cartoon (Osterhase)
Update 02/08/16: looks like this was one of those “other” times. As of this writing, the S&P 500 is down over 3% from when this article was written. Ah well.

7 thoughts on “RSI(2)<25 X6!”

  1. Regarding the workaround from the title: I am not a WordPress user, but just guessing, if the title would be “RSI(2)<25 X6!” (without ” of course), it may look ok.

    1. The visual display of my comment doesn’t show what I meant, so here I go again: try to use “RSI(2)&_l_t_;_25 X6!” (without ”, and remove all _)

  2. Hi This is the kind of analysis I love. Please do more back testing like this. It is more superior to anyone’s opinions.

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