Wednesday, July 16, 2008

New Lows In Rarified Air

The other night I discussed how I measure the % Net New Lows on the NYSE. Today the percent of net new lows spiked even higher. Over 1/3 of all issues hit a new 52-week low today according to my data provider. This is the first time that has happened since 1990. Below are the results of buying this setup and holding for “X” days going back to 1971.

An average gain of 6% over the next 4 days.

But I didn’t show 1970, which wasn’t good. Below are all instances with a 4-day holding period going back to 1970, which is as far as I have the data.

Let’s hope 2008 isn’t like 1970. I’m more than ready for a decent bounce.

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1 comment:

Feanen said...

I think including 10/19/87 is going to skew the results. Given that it was one of the worst single days in the history of the stock market, the oversold condition then was worse than anything we have now. If you take out that trade, then the average trade drops to 2.81% and the average winning trade drops to 6.4%