Using the Time Since RSI Extremes as a Directional Indicator

Summary

The RSI Past indicator turns oscillator extremes into a simple directional reading. It records the bar index of the latest overbought and oversold readings, then subtracts the oversold event’s index from the overbought event’s index. A positive value means the latest overbought event occurred more recently; a negative value means the latest oversold event is more recent. The plotted reading grows in magnitude as new events of the prevailing type occur, and its color reflects the sign.

The accompanying examples describe individual stocks whose readings aligned with subsequent directional behavior, and raise a question about whether one stock’s persistent positive reading signaled relative strength. These are illustrative observations, not a systematic test. The indicator does not define trade entries, exits, or risk controls, and its output depends on RSI length and threshold choices. A long interval without a new extreme can leave an old directional reading in place, so it should not be treated as a standalone forecast.

Key ideas

• The indicator stores the bar index of the latest RSI overbought and oversold readings.
• Its value is the difference between those event indices, with the sign indicating which extreme occurred more recently.
• Repeated extremes in one direction can increase the magnitude of the plotted reading.
• The document provides stock examples but no systematic performance evaluation.
• A stale reading can persist until RSI reaches the opposite or same threshold again.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.