2 replies to this topic

[ChickenLittle]

Excerpt from Lowry's (6/7/07) "In addition, preliminary data indicate that today's sell-off was a 90% downside day, in which down volume and down points were more than 90% of the total up/down volume and total points gained/points lost. Investors should note that, historically, 90% down days are most often associated with market bottoms rather than with the start of major declines." I believe that during the February-March decline, the first 90% down day was a little more than half way to the bottom. The first 90% down had a failed rally and then the capitulation. If we have a failed rally tomorrow, IMHO we could see another round of bloody capitulation. My E-wave work holds out the possibility of another rally to new highs. But some indexes appear to be complete and that means there is reason to be cautious.

[mortiz]

Thursday's down volume percentage almost hit 95% according to the NYSE's own data dumps, which is fairly rare, and the studies of up and down volume day extremes has been documented extensively at Fib's Technical Watch site.... these are bullish events going forward, but as you suggest, there is likely additional work left for a moderate amount of more price depreciation. What is more rare than 90% or more down volume days since the 2003 bottom, are days when declining issues (AD stuff) constituted over 90% of the total... which occurred Thursday as well. Only one other instance since the current bull began have declining stocks accounted for 90% of the total, May 7, 2004. It is likely nominal lower price lows are in order in the coming weeks, but the internals momentum lows are in. Mop up operations in price, digestion, more fear, than off to new all time highs in the next few months... if not earlier. FWIW Randy N.

[ChickenLittle]

In 2002, Paul Desmond of Lowry's Report was awarded the Charles Dow Market Technician Association award for the study on 90% downside days. Friday 9:45 AM and there is no rally yet. IMO, the EW count doesn't look complete (yet).