Dayvejohnson on the Markets

Remember High RSI Post?

In my post last month I had noted some surprising data about the high RSI readings on the SP500 and Dow 30. Well that period ends today and that trade would be closed at the open tomorrow. How did it do? Up about 2% from that high RSI reading. A bit less than the average winner.

I had noted then:

The results are quite interesting. If you were to buy the SP500 index the opening after the index had closed above the 68 reading on the RSI and exited the trade the open after 22 days had elapsed - the results are as follows:

98 Trades would have triggered

70 Winners (71.43%) - average profit 2.68%

28 Losers (28.57) - average loss 2.05%

Seems to be a bit of an edge there.

I also ran it on the Dow Jones Industrial going back to May of 1915 . Results as follows:

220 Trades would have triggered.

142 Winners (64.55%) - average profit 3.36%

78 Losers (35.45%) - average loss 2.66%

Again we see similar results. Will it play out this time? I'd say we have about a 65% chance ;)

Well that is about what we got. And look that RSI is heading back to 68...........



Have a Great Night!

Dave Johnson

dayvejohnson@gmail.com

http://dayvejohnson.blogspot.com

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posted by Dave Johnson @ 10:07 PM