Joined Nov 11, 2007
1,458 Blog Posts

History in the Making: Third Consecutive Day QQQ RSI2 < 1

Folks, this is history in the making. QQQ RSI2 closing beneath 1 for the 3rd consecutive day is extremely rare. This is only the 5th time in the history of QQQ that this has occurred.

Here are the dates for all occurrences:

  1. 5.18.2006
  2. 10.10.2008
  3. 7.1.2010
  4. 7.2.2010
  5. 5.16.2012

What can we expect to happen next? Let’s test it and find out what has happened in the past…

The Rules:

Buy QQQ at the close if:

  • RSI2 < 1 for the 3rd consecutive day

Sell X days later. All QQQ history used. No commissions or slippage included.

The Results:

Yes, there are only 3 samples. We couldn’t say that history was being made if there were enough samples to get something statistically significant.

The average next day bounce of 3% is certainly enticing. Again, beware of the miniscule sample size.

What is probably more instructive, and more generalizable, is that volatility ramps up. What we have are 3 swings averaging 3% over the course of only 10 days.

Perhaps the most important takeaway is that there has only been 1 previous date when QQQ RSI2 has closed beneath 1 for 4 consecutive days…

Good luck tomorrow!

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  1. Dr Fly

    good stuff

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  2. duc


    Forget the technicals in a fundamentally driven market, or really I should say politically driven.

    Technical levels/indicators are chaff if Greece or Spain via Germany, make an announcement that the market either loves/hates.

    Bernanke going all-in with QE4 would have the same effect.

    Hey flippe-floppe, what’s happening baby!

    jog on

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    • Woodshedder

      Hmmm. I don’t know that we forget the technicals. We still need them to tell us how extreme or how oversold the action is. In fact, the more extreme the markets get, the more likely we get an announcement.

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  3. rickyroma0

    And now we have 2… dates when QQQ RSI2 has closed beneath 1 for 4 consecutive days

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  4. Mark blankenfein
    Mark blankenfein

    So much for that theory….but nice try!!

    …just when you think you have it all figured out LOL

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