After having presented mostly bullish arguments most of the way down to here,
Mark Hulbert has been rather intent upon finding the bull's flaws in his recent articles IMO, including this one about the four days up phenomenon. My point is not to bash Hulbert, but to have you read the sentiment posted below this article and observe his readership ripping him a new one for not being nearly bearish enough to their liking.
I suspect if Hulbert's point was statistically significant, he would have posted the numbers as he typically does. What he offers here instead is this opaque comment:
"On the other, the implications are negative of double-digit gains over a four-day period. More often than not, according to the historical record, the stock market on such occasions was a bit ahead of itself. On average, the Dow was lower one week later -- and lower six months later, as well."
More importantly, don't forget that Trader Vic makes the four day rule conditional upon its appearance after an IT downturn. There are indeed many instances where four-days-up double-digit-gains got swatted long after the initial four day turn had appeared and an IT rally had ensued. Remove the echos from Hulbert's data and you may walk away with a different perspective. Location, location, location.
Edited by spielchekr, 28 November 2008 - 09:16 AM.