I'd love to test a reversion-to-mean strategy whereby I go short the top 20% (i.e. 80%+) and simultaneously go long the bottom 20% (i.e. 20%-). One of the conditions would be that the shorts have 2 consecutive months of declining values and the longs have 2 consecutive months of increasing values.
High-Low Range Charts - Market Breadth Analysis
- Thread starter viktor_k67
- Start date
More recent breadth charts for the NYSE and S&P 500.
As pf now, we have more bearish stocks which are traded closer to their 52-week lows than bullish stocks (traded closer to their 52-week highs) and the number of stocks dropping to their 52-week lows is on the rise. See the NYSE High-Low Range Chart below:
On the S&P 500 the number of bearish stocks overcame the number of bullish stock on Monday (Dec 7, 2015) - see the chart below:
Chart source: http://www.marketvolume.com/quotes/highlowrangechart.asp
No matter what other say about the great economy and great market, I will not believe in Bullish market while I see such big number of bearish stocks on the market.
Yes, we have big companies like AAPL, MSFT, HD, GOOG, NKE, NFLX, AMZN which still hold the main indexes (DJI, S&P 500, Nasdaq 100) close to the top. Yet, I do not want to be in the market when these stocks will dive into a correction. The weighting of these stocks in the main indexes is relatively high and by taking into account that smaller companies are already in deep correction, this pay push indexes fast and strongly down.
As pf now, we have more bearish stocks which are traded closer to their 52-week lows than bullish stocks (traded closer to their 52-week highs) and the number of stocks dropping to their 52-week lows is on the rise. See the NYSE High-Low Range Chart below:
On the S&P 500 the number of bearish stocks overcame the number of bullish stock on Monday (Dec 7, 2015) - see the chart below:
Chart source: http://www.marketvolume.com/quotes/highlowrangechart.asp
No matter what other say about the great economy and great market, I will not believe in Bullish market while I see such big number of bearish stocks on the market.
Yes, we have big companies like AAPL, MSFT, HD, GOOG, NKE, NFLX, AMZN which still hold the main indexes (DJI, S&P 500, Nasdaq 100) close to the top. Yet, I do not want to be in the market when these stocks will dive into a correction. The weighting of these stocks in the main indexes is relatively high and by taking into account that smaller companies are already in deep correction, this pay push indexes fast and strongly down.
Or we will wait to see what 2016 bring us
I guess we starting to see it...
http://northmantrader.com/2016/01/17/pendulum-swing/
This is an excellent article on market breadth that warns that although Bears may ultimately prevail, the market may be positioned to bounce soon.
This is an excellent article on market breadth that warns that although Bears may ultimately prevail, the market may be positioned to bounce soon.