NASDAQ: Perfect Bullish record looking out 4 weeks basedon RSI signal

Persistently OB RSI is bullish..
When the Nasdaq's RSI(2) has closed above 98 for 7 consecutive days, the Nasdaq has historically always finished higher 4 weeks later. There were 20 prior occurences, all of which closed higher 20 trading days later. In 18 of 20 cases (or 90%) of the time, the Nasdaq was trading higher 10 tradings later. And finally, even for the very short term, the odds are favorable: In 17 of 20 cases the market was trading higher with in the next 3 days.

Streaks..
Nasdaq has closed up for 10 consecutive days. Once more this persistant buying appears to present rather favorable odds for the intermediate term. In 25 of 30 prior instances, the Nasdaq was trading higher 20 days later. Similarly, in 23 of those 30 cases, the market was trading higher 10 days later.


Once more these studies suggest strength begets strength and that we should consider any retrace or dips as buying opportunities.

Nasdaq: Short Term and Intermediate term buy

Last night I pointed out conflicting studies. The Nasdaq 100 closing up 10 consecutive days argued for a close higher in the ST, while the DIA streak as well as BKX divergence with the S&P argued for a lower close on the NYSE and S&P. The markets today followed those expectations, with the S&P and NYSE closing down, while the nasdaq closed up.

With the NASDAQ 100 and the NASDAQ composite having closed up for the 11th consecutive day today, i thought it would be worth to look at historical performances of the composite after such occurrences. There have been 20 prior instances where the NASDAQ composite has closed up for 11 consecutive days. As you can see from the table below, in 18 out of the 20 (90%) cases the NASDAQ was trading higher at some point in the next 3 days. Also notable, is that the market was trading higher 18 out 20 (90%) of the time 4 weeks later.

Ticker	Date/Time	Streak	Close	PctChg N1	PctChg N2	PctChg N3	PctChg N10	PctChg N20
^IXIC	3/9/1971	11	104.41	-0.26	-0.14	0.09	0.67	3.02
^IXIC	4/12/1971	11	108.87	-0.02	0.19	0.75	2.08	1.18
^IXIC	12/14/1976	11	94.65	0.29	0.30	-0.01	1.73	1.45
^IXIC	11/18/1977	11	102.22	0.13	0.69	1.49	1.89	1.06
^IXIC	6/9/1978	11	124.41	-0.10	-0.14	0.08	-2.95	-4.04
^IXIC	8/8/1978	11	130.49	0.88	0.84	1.16	2.59	4.59
^IXIC	6/14/1979	11	136.02	0.17	-0.12	0.02	1.51	1.84
^IXIC	8/21/1979	11	147.99	0.51	0.77	0.95	-1.32	0.98
^IXIC	6/18/1980	11	157.19	-0.29	-0.43	-0.13	1.27	7.30
^IXIC	10/14/1980	11	199.02	0.21	-0.54	-0.89	-2.64	-0.62
^IXIC	1/22/1985	11	268.40	0.86	1.45	2.09	5.29	7.04
^IXIC	11/12/1985	11	304.40	-0.16	0.26	0.59	2.00	4.76
^IXIC	2/14/1986	11	350.20	0.63	0.54	0.83	2.74	5.65
^IXIC	1/15/1987	11	392.60	-0.69	0.00	-0.13	-0.41	4.23
^IXIC	6/17/1987	11	428.40	0.14	0.16	0.21	-0.91	1.12
^IXIC	2/24/1988	11	363.10	0.14	0.08	1.07	4.74	4.68
^IXIC	5/24/1990	11	458.30	-1.00	-0.17	0.11	0.57	0.22
^IXIC	2/6/1991	11	439.20	-0.96	-0.55	1.12	1.64	8.32
^IXIC	1/7/1992	11	602.29	1.33	2.91	2.23	0.43	4.77
^IXIC	9/20/1996	11	1,219.69	-0.67	-0.36	0.41	2.29	1.87
^IXIC	7/22/2009	11	1,926.38	0.00	0.00	0.00	0.00	0.00

This suggests that any dip over the next few days could result in a buying opportunity.

Evening Summary: RSI(2) sell, Nasdaq100 Streaking...

RSI(2) again...and again...
On July 14th i pointed an RSI(2) sell which argued that the S&P should trade lower within 3 days. That signal is off the board tonight and has failed to produce positive results. This signal used the RSI 90 as a trigger value.
Last night i pointed out once more another RSI(2) sell signal, this time based on consecutive readings above 90. That signal has a 3 day timeframe, so it has until monday to play out. For it to succeed the S&P has to trade below 932.68 tomorrow.

Tonight we have yet another RSI sell, this time using RSI 98 as trigger value. In the past decade, when the RSI(2) has closed above 98, it has generally been a good signal to sell into. Out of 23 occurrences, the market was trading lower 21 times within the next 3 days.

Side Note: I think it is important to keep in mind that in periods of high speculation, Overbought and Oversold conditions can persist for long periods of time. Further more, when the market makes higher highs in overbought, it is usually BULLISH looking further out. Now i would not use a fast reading such as the RSI(2) to guage this type of persistance, but i would use an RSI(5) or higher. Here we are beginning to see the market make higher highs in OB.

Nasdaq 100 Streaks:
The nasdaq 100 closed up for 7 consecutive days while also closing above it's BB(20,2) upper band. Since 1990 there were 18 such occurrences. In 16 cases, the Nasdaq 100 was trading lower within 3 days (or 89% of the time). In fact, in all but one of the case, the Nasdaq 100 closed lower within 2 days. This study implies a likely lower close by monday on the nasdaq.