Saturday, October 24, 2009

This guy could be right, we'll see......


http://www.safehaven.com/article-14811.htm

2 comments:

bill102205 said...

Mark: $COMPQ(87) and $TRAN(09) do match up quite well.
Author says watch for break below support (approx. 3656).

I did notice something interesting, and that was the distance between the $TRAN and 200-dSMA, at the time when the $TRAN started dropping (Oct 21). Price was at 4066 and MA at 3258. It was 25%.
Trader's Narrative $SPX - has had some articles saying when that difference is 20% or over, which is rather rare, price will decline over the short term - 3 mons., but back positive after 6 mons.
$SPX 8/13/1987 was one of the 'outlier's points in their article. $SPX was 18.83%.
Whether the $TRAN is representative enough to fit the 20% category?
http://www.tradersnarrative.com/what-happens-this-far-above-the-200-moving-average-3007.html#more-3007

bill102205 said...

Mark: Another subject - GAPS
Marty Chenard has an example today:
http://www.stocktiming.com/Monday-DailyMarketUpdate.htm
The gap down occurred Oct 3-6, 2008, and was just filled Oct 15, 2009.
His point is that, since the gap has been filled, SPY has not been able to break above that gap.

My question is a bit different - why are they so hard to fill?
In a gap down:
* I assume that not many shares were bought during that gap period, that investors are holding?
* assume there is no psychological barrier?

But why is it so difficult to fill that gap?