(click table to enlarge)
The failure to make a 10-day high after two strong up days suggests there was a strong move down prior to this. Most often the strong down move will reassert itself or at least cause a pullback. As a point of comparison, below are the numbers when the back-to-back the strength does coincide with a 10-day high:
(click table to enlarge)
Strong negative expectations turn positive under this scenario. I've shown before how positioning is important when interpreting action. This is another example of that.
2 comments:
Thought provoking, Rob.
"Positioning is important when interpreting [Market]action." Very right--knowing where the Market IS allows an educated (as opposed to blind) guess as to where it’s going.
The more nuance-filters one can throw at it the better.. until 'diminishing-returns' sets in, then stop. That was always G.Appel's method.
Positioning also includes awareness of where one is in terms of monthly seasonality (I use classical Fosback Mo/Holiday); annual Market seasonality; and unique Sector-seasonalities, if one is leaving the broad indexes for the narrower focus...
Daniel
brilliant article...
one question i had was do you use closing high or intraday high? also i would imagine if everything was doing the same then the signal would more effective.
e.g. at moment
quite a number of indices are making 10 day highs (closing prices since 15th june)
qqqq
shanghai a shares (shashr:ind)
H Shares (hscei:ind)
Taiwan (twse:ind)
these have also been the leaders in the market this year.
would this cause you to be less bearish?
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