FWIW, the Connors VIX Reversal gave a buy signal on Friday's Data. (http://users.intermediatn.net/lolney/market_files/Watchlist.htm) Three positives is not particularly historically significant in calling a major bottom, however.
A few other signals emerged which appear more unique:
The NAZ TRIN on Friday was 1.26. Two equal/lower values have occurred in the last eight years: 1.26 on 6/17/92 (next day was NAZ low); 1.29 on 10/30/97 (corresponded to the NAZ low). In the 1998 correction, the double bottom had values of 1.08 (8/31/98) and 1.19 (10/17/98).
The NAZ thrust index is similiar to the Arm's Index (TRIN) but includes upside/downside volume in its calculation. Friday's NAZ thrust was -56. This is an 8-year low! The next lowest value was -55 on 8/31/98 (the first market low in the Fall, 1998, correction).
On the Momentum tab of the Market Sentiment Page (http://users.intermediatn.net/lolney/market.htm) are a group of advance/decline and up/down volume short-term momentum indicators. Two consecutive all-green days have occurred three times in the past 10 years: 10/28/97, 8/28/98 and 10/8/98 (the exact market low).
The VIX closed at 39.33, the highest closing value since October 14, 1998. (peaks were 48.33 on 8/31/98 and 48.56 on 10/8/98) Prior to this, the VIX close was 39.95 on 10/27/97, coincident with NYSE low and 3 days prior to NASDAQ low.
John Bollinger has described a Put Volume Indicator which works as follows. When total CBOE put volume doubles its 10-day average, you have a signal. The signal generally comes at the momentum low, which is sometimes coincidental with the absolute low. A simple logical statement of this indicator is: If put volume divided by 10-day average put volume is greater than two, buy. His original article described 23 signals in the 1983-1992 period (2 signals were false; the last four signals in 1992 were coincident with market bottoms). I have limited option data, but Friday had the first signal generated in two years: 2.17 (http://users.intermediatn.net/lolney/market_files/Bollinger.htm)
The three other closest values to a true signal:
08/21/98 1.97 six trading days before low (but a sharp further drop)
10/08/98 1.78 exact market low
10/15/99 1.88 exact market low
This may not be THE bottom, but it's close! I'll be buying Monday.
leo
Addendum: Interesting to note that the weekly NAZ Coppock curve has finally turned down after its meteoric rise. |
