(click image to enlarge)
What I found interesting and compelling about the above test was NOT the size of the average decline. In fact that was somewhat weak. It was the fact that 95% of instances closed below the trigger day close at some point in the next 5 days. This suggests that while the lagging new highs might not indicate an immediate selloff, the market has consistently struggled to move higher.
2 comments:
Hi. Sorry to sound so thick. How do you get 95% here? From the numbers, I don't see a 95% probability. I see more like 60%
Regards
It's not evident by looking at the table. 60% or so is how many closed lower 1 week later. 95% is how many closed lower than the trigger day close at SOME POINT during the week - regardless of where they finished the week.
Rob
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