Tuesday, August 2, 2011

What Happens After Seven Straight Down Days?

I'm hearing more people turn bearish which makes me start to think about a tradeable bottom (i.e. "bounce"). Behold, some indicators as food for thought:

There have been seven straight down days, which is 3 SD, and the most since October 2008!

The S&P 500 Relative to its 20-Day Moving Average is 2 SD below the mean, often associated with bounces.

Percentage of stocks above twenty day MA and fifty day MA are also at levels associated with bounces.

I am not bullish, but I would not chase the market lower here.


Stagflationary Mark said...

I'm looking for 1200 on the S&P 500.

The reason is not what you might expect.

It's just been a long time since I've been able to mention the Rubicon.

I sure hope someone is thinking of selling something someday or it will ruin my ongoing Rubicon joke.

I'm in no particular hurry though. I'm sitting in long-term TIPS and I-Bonds that I intend to hold until maturity.

If it happens it happens. If not, so be it.

CP said...

Oh, I am sure we'll be crossing it again, soon.

Stagflationary Mark said...


It teases me.

CP said...

Haha. It's an 11 handle after hours. Does that count?

Stagflationary Mark said...


The Rubicon joke cannot happen this week. There isn't enough time.

The S&P 500 must close below 1200. That resets the joke.

The S&P 500 must then close above 1200.

The S&P 500 has crossed above 1200 25 times. It first crossed in 1998.

26 would be truly miraculous! There will be much confetti! ;)

(What is truly scary is that I didn't feel the need to adjust the 1200 level for inflation. Maybe I looked at too many Japanese stock market charts.)

Stagflationary Mark said...

1199.38! Woohoo! ;)