The Bid & Ask

Quotations, Dispatches, and the Daily Tape

Thursday, August 13, 2026

Rejected thesis

Bullish RSI / MACD divergence (single-name timing trigger)

The result

Code: research/bullish_divergence.py Report: research/bullish_divergence_report.json (n=41,288)

Headline: a pivot low at lower price than the previous pivot low but with the oscillator at a HIGHER reading is a textbook bullish divergence. Both flavours (RSI and MACD histogram) produce material edge even unconditionally — and amplify cleanly when stratified by trailing 252d drawdown:

Pattern × condition n 40d edge hit @ 20d
rsi_div all 9,869 +6.78 % 77 %
rsi_div dd ≤ -30% 4,079 +11.05 % 78 %
rsi_div OOS 2020+ dd ≤ -30% 2,467 +12.86 % 80 %
macd_div all 31,419 +5.33 % 76 %
macd_div OOS 2020+ dd ≤ -30% 5,445 +11.06 % 77 %

This is one of the strongest standalone short-horizon signals in the repo — bigger raw edge than every other chart pattern we've tested (beats coil_breakout, PEAD, bear_flag, even unconditional gap patterns). The OOS amplification on drawdown is on top.

The reason oscillator divergences work where oscillator extremes don't: a divergence requires two pivots — i.e. price has actually established a swing-low structure — whereas an extreme reading can fire anywhere mid-slide.

At a glance
Sample41,288
Validatorresearch/bullish_divergence.py
VerdictRejected

Every result here is reproducible from the script named above. Reports are in the repository.

Other rejected theses