RSI(2) On QQQ (Nasdaq)

Back in 2016 I published an article on using short term RSI (relative strength index) on SPY. Let’s test how a slightly different strategy performs on QQQ:

  1. RSI(2) must be lower than 10.
  2. IBS must be lower than 0.2 (read here for an explanation of IBS).
  3. If both 1 and 2 are true, then enter at close.
  4. Exit at close when today’s close is higher than yesterday’s high.
RSI(2) works even better on QQQ than on SPY.

The numbers look like this:

Buy and hold returns 7.87%, while the strategy returns 13.79%, a pretty big difference. Even better, the strategy has performed very well in four bear markets (2000-2002, 2008/09, 2018 and Covid-19 in March 2020).