Friday marked the fourth consecutive day that the RSI(2) of SPY closed above 90. Is there any edge to shorting here?
The Method:
Sell short (SPY: 114.97 +0.45%) at the close any time the RSI(2) of the index will stay above 90 for four consecutive closes.
Buy to cover on [...]
Despite the small sample size of 28 trades, there appears to be a significant edge here. From a sentiment perspective, the bulls seemed somewhat incredulous that the markets closed higher for a fourth day. Perhaps they will be more willing to sell tomorrow, sensing that the market has gotten ahead of itself.
The Method
This study will [...]
Last week I wrote about the edge that develops when the market makes consecutively lower closes. Excessive bearishness was the soup du jour, and yet the study showed a bullish edge.
Today (Wednesday) marks three consecutive higher closes, and the soup du jour is clover (bulls love clover), so I want to take a look for [...]
