INDEX UPDATE
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I just finished going thru 28 years of data, starting with 1970. Here's my conclusion.
CRITERA - NEW HIGHS under 100 & NEW LOWs between 10-50 for 1 month, and such occuring after a significant runup of greater than 5%.
I lost count, but such patterns noticed since 1970 was near 25, so I will conclude that such is statistically suitable.
After the month of sufficing the above criteria, the NYSE pulled back approximately 5% or more. Prior to the big corrections in 1973, 1987, and this year, the above criterium occured as early a 1-2 months prior to the big decline.
I lost track of the exact probability since my daughter used the paper I wrote the data on to pick up something the dog left on the floor - I wont go into anymore detail ggggggggggggggg. However, to the best of my recollection it was very close to the 90% level of accuracy.
This study does not conclude or infer that a crash is coming, but only that after such criterium occurs there is a significant pullback of approximately 5% or more within the following month.
So, as long as the criterium is met, we should see a pullback within 4 weeks. Lets say that the rates are cut next TUE, but the NEW highs do not get above 100 after the rate cut - then we should see a pullback of about 5% or greater.
Seeya
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