Period RSI

         Use the period RSI question to test overbought and oversold levels in the market and their impact on price behavior. You can also customize the RSI to be calculated for different time periods.

Example:

         The 9-period RSI is above 80 between the close of <K> and <L> periods.

Questions from Traders:

         Is a high RSI level in the last 40 minutes of trading significant? Does the market open lower the following morning? Does the market close lower the following day?

Setting up the Search:

Click on the parts of the box below where appears for explanations of features.

Answers:

         We discovered, as a result of the search shown above, that the market reaches overbought levels above 80% about once every two weeks. We then refined the search to determine how often the market opened the following day lower than the overbought day’s close. Nearly 61% of the time the market opened lower the following morning. When we tested the market on a close versus close basis, we found that the high overbought levels had almost no impact on the next day’s closing prices. The following day closed lower about half the time.