Assessing Market Action With Indicators And History
Wednesday, July 30, 2008
A Quick Recovery
After falling hard yesterday the market made up all of those losses and then some today. Historically, these kind of sharp recoveries have been bullish over the next couple of weeks. Below is a study which exemplifies this:
Of the 19 instances, 6 of them dipped below the low of the “big down day” at some point in the following 12 days.
Overall, action seems to have turned more constructive in the last two days.
In this blog I will be examining market action and quantifying my findings. Using sentiment, breadth, price and volume indicators - both standard and customized - I will try and uncover short-term edges which could be taken advantage of by market participants. I will frequently add opinion to these studies and may sometimes post opinions without quantifiable research behind them.
All content on this site is provided for informational purposes only. It is NOT a recommendation or advice to buy or sell any securities. I may hold positions for myself or clients in the securities or industries mentioned here. There is a very high degree of risk involved in trading securities. Your use of any information on this site is entirely at your own risk.
I have traded professionally since 2001. From January 2003 through February 2007 my bi-weekly column "Rob Hanna's Putting It All Together" appeared on TradingMarkets.com. I have been conducting quantitative research and designing trading systems - mostly focused on short-term edges since 2004.