It's funny the things one reads ...
I recently finished the book "Pit Bull, Lessons from Wall Street's Champion Trader," by Martin "Buzzy" Schwartz. At page 186, he says:
"When I was at Edwards and Hanly in 1974, John Brooks, a technician there, taught me a very simple but interesting indicator. The new highs and lows are always listed alphabetically in four columns in the same size print. John told me, 'Marty, whenever you can lay a ruler on the new highs or the new lows and they exceed twelve inches, prepare yourself to become a contrarian and go the other way.' In 1974, when the lows exceeded twelve inches on several days, it was one of the greatest buying opportunities of the century. In October 1987, just before Black Monday, the new highs exceeded twelve inches several times. What a great time to sell. This is a trick that I've never seen written or heard talked about anywhere and it very seldom happens, but when it does, pull out your ruler."
FWIW, I was looking through Barron's a few minutes ago and noticed there were quite a few new lows, so I measured them. 14 3/8"
JMHO. |
