Technical analysis is the study of trading patterns as technicians we look for repeating patterns.
The current patterns are so extreme there are not enough examples to draw conclusions.
On Thursday there were 1132 new lows on the NYSE the 3rd highest number ever recorded and 33% of the total issues traded.
The records are:
10/20/1987: 1174, 57%
8/31/1998: 1183, 33%
8/16/2007: 1132, 33%
In the late 1980's I found when ever there had been more than 200 new lows on the NYSE there was always a retest of the low. There are nearly twice as many issues traded now so it is probably safe to double that number. The 1132 new lows last Thursday makes a retest of Thursday's low likely.
Edited by Rogerdodger, 18 August 2007 - 11:41 AM.