High-Probability Mean Reversion Indicator (ETFs Heading into the Week of October 11)

high-probability-mean-reversion-indicator-week-october-11-15

Below is my list of ETFs with the most liquid options for the week of October 11.

Here are the various levels I use to determine if an ETF is in an oversold or overbought state.

Very Overbought – an RSI reading greater than or equal to 90.0

Overbought – greater than or equal to 80.0

Neutral – between 20.0 and 80.0

Oversold – less than or equal to 20.0

Very Oversold – less than or equal to 10.0

I will provide this information for the following ETFs on a weekly basis going forward. Stay tuned!

high-probability-mean-reversion-indicator-october-11

Some may average together various RSI readings, like the 2-day, 3-day and 5-day, but that makes absolutely no sense. We look at various levels of overbought and oversold over different time frames and use these readings, again, as a way to help decide when to enter and exit a trade.

3 comments on “High-Probability Mean Reversion Indicator (ETFs Heading into the Week of October 11)

  1. Just on

    How are the above Oversold & Overbought is calculated? I have RSI 2-day, 3-day & 5-day setup in my tos but these value don’t match with none of those!

    Reply
    • Andy Crowder on

      Just,

      I am not using the RSI at those levels. This is my own proprietary overbought/oversold level. I hope this helps. Kindest.

      Reply
  2. Just on

    Thank you Andy! So as per above table , at that point of time, none of those were in oversold or overbought areas? No potential trades?

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *