Strategy: Buying Relative Strength on Big down Days

F

Falcone

Has anyone back tested a very simple strategy of buying relative strength on big down days such as today in names that are not considered defensive?

For example the broad market is down 2% on a given day but a particular growth or value name is up on the day or barely down, what do returns look like going out a month/3 months...etc...
 
I dont know about returns going out for months but today SPCE was quite strong relative to SPX despite the significant gap down in both. So SPCE was a buy, but its not an easy buy, emotionally it can be hard to pull the trigger
 
SPCE could be an example of what I am talking about but I think its slightly skewed currently because it is a hot stock with a lot of fast money flowing in and out of it right now. Im more talking about say a day the Indexes are down 2% but American Airlines is up 1.5%, does it mean anything longer term?
 
If a stock has been beaten down for a significant amount of time (months, years) and starts to display that kind of relative strength, its usually bullish. Especially if the stock is shrugging off bad news
 
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dealmaker said:
Notice that while retail was buying TSLA, SPCE and MAGA stocks, the best program trading firms were selling to retail all they wanted, and were net short for the week; setting up for Expiration Week and the February Mini-Crash. Program Trading volume last week was over 86% and normal for Post Unemployment.

https://www.elitetrader.com/et/threads/program-trading-stock-report.340733/
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What is program trading? If it was really accurate won't you make tons of money from folloiwng the big boys.
 
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