📈 RSI is Telling Us...

RSI is telling a clear story about the market right now.

RSI Indications

RSI is a very important indicator because it is one of the only leading indicators that you can use to look at stock performance.

I came across this data this weekend and I think it is important for you to understand as you trade the market.

RSI Data

What you’re looking at below is the percent of the S&P 1500 (expanded from the S&P 500) and the percent of stocks with a 2-day RSI over 70.

You can see that we’re hitting a key level of ~80% of stocks hitting a 2-day RSI over 70.

However, what I find even more interesting is that if you look at when we reach this level historically, it’s not a sell signal. In fact, if anything it’s a buy signal.

I marked off the times when we exceeded this level and you can see that in essentially any of these scenarios, you would have done well if you bought the market.

This data is a good reminder that just because RSI is overbought, does not mean that the move is over.

You can see stocks remain overbought or work off being overbought and continue moving higher for a long time.

In the video below, I talk about how I am interpreting this data and which stocks it bodes well for: