10-day RSI for SPY moved below 30 for the fourth time in 2011. I lowered the look-back period from 14 to 10 to increase sensitivity. RSI became oversold in March, June and now August. Oversold does not guarantee a bounce, but it does increase the odds of at least a dead-cat bounce.
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About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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