Check this out.: From Doctor Brett BTW, I'd link but he would stalk me and I'm about to make some fun.
I noticed on Friday that we had an explosion of stocks making new 20-day lows across the NYSE, NASDAQ, and ASE. New 20-day lows hit 4129, a level we've seen only 11 times since late 2002.
(Eric's note: The end of the 2000 bear cycle was..... LATE 2002 October. So this dateset he has is only the Bull cycle, and this bear cycle.)
Interestingly, when we've had more than 4000 new 20-day lows, there has not been an intermediate-term bullish bias. Indeed, 30 days later, the S&P 500 Index (SPY) has been up 5 times and down 6, for an average loss of 3.0%.
(Eric's note: Since this data is actually Neutral being 50% up and 50% down, assuming some margin for error... Especially since there are 11 data points, and since it's an ODD number. If you flip a coin 11 times, Odds are it will be either 5 heads, 6 tails. or 6 heads 5 tails, but it tells you nothing about the odds of it going Heads or tails, besides 50/50. So IN FACT This Data is in no way INTERESTING.)
A more interesting observation, however, is that--of the 11 occurrences of 4000 or more 20-day lows--all but one (5/10/04) has occurred since the second half of 2007. During the bull market, pullbacks led to an excess of new 20-day lows, but not such broad weakness. When markets have been broadly weak, it's been an indication of bearish trend conditions and we haven't seen a bullish edge going forward.
(SO, of the Dataset; of This bear market, ALL but one have happened since July. Except one, during the bull. .... ONE COULD SUPPOSE that this just reflects the violent move we had just 3 months ago.... Let us also think about where we were 20 days ago, and that the market has dropped some 30% since then..... One could suppose that all this data says is that it reflects a large slide in the market, in the past 20 days..... WHICH HAS A NEUTRAL BIAS.
Let us also talk about how this data set is 6 months. One data cluster has to be the July low, and August 15 we were up 30 days later. Another cluster in October 11, November 11 we were down 30 days later. The third Cluster is November 11 low December we were Up.....
Ok... I will bet that the 5 that were bearish were all in October(the 2004 one was bearish and is 6), and maybe January and the others were July, and November.)
I think I can include this in "Crazy shit that people are saying."
Sunday, February 22, 2009
Bad dataset
Subscribe to:
Post Comments (Atom)
4 comments:
I read this last night and thought the same thing. Why isn't he looking at data from the last bear cycle???
I bet he would pull the data if we asked, and I bet it would show a positive price bias (I won't say bullish) going 10 days out in a bear cycle. Looking 30 days out is ludicrous.
Furthermore, he implies a 3% negative price movement 30 days out is interesting or unexpectedly bearish. Compared to the last 30 days, a mere 3% decline IS a bullish move. Certainly if I had loads of short positions, I'd rethink it at this point.
I was going to say something to him, but my ability to be diplomatic isn't good right now... What it also may say is something about the number of 20 day highs there were... Basically "there was a Top, 20 days ago."
Becky is on Meet the Press.
Greggory is awful, they have to find someone who LOVES politics.
Right, we are always playing game theory. I was thinking about this. Do you want to be Short, Long, neutral right now.
Well, most of us can feel the turn coming. The remainder of traders aren't the old fools who have been blown out, every turn for a year. so ... seems like at best Many people are "Waiting to get long."
I think the market may surprise us on Monday.
I have this other thought about the gaps, that brian Shannon reminded me of as I checked out his video. Basically we are having more of a tendency to move in Gaps right now, than in actual buying and selling. suggesting that maybe "those who are going to sell have sold"
Chris Mathews just talked about dow 6000 more of a, how are we going to get it back, than a worrisome event"
I commented on Brett's site.
I think the neutral bias is closest only because the volume stinks. Only the XLF had volumes similar to November. I mean, come on, who is still long Citi at this point (besides TK, of course).
So I guess a reasonable plan would be to go long financials at least for a couple trading days. BBT or WFC?
Even better candidates for a technical bounce are real estate and homebuilders... higher volume. Do I see a doji on the IYR weekly with high volume????
Still waiting for the bin Laden catalyst....
You know I've been tormented all morning, as nobody has mounted a plausible defense of why we should help our neighbor.
I still think the dr. brett stuff is more an indicator of what happened 20 days ago than what will happen in 20 days.
we could still get a nice engulfing pattern like we got in october on the spy I think.
Sometimes we get 2 day bottoming patterns. examples are Jan and (I don't remember if it was the October or November low. And it is too early to pull out charts)
seems if they don't puke them up on monday they may not do it.
Still good to be cautious, we managed high volume on friday, but we only rallied a hundred or so points.
This nationalization meme, just seems like it has gotten out of hand, but you have to wonder how many more sellers there could be.
Post a Comment