Complacency Indexes Message Board

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Strategies & Market Trends : Complacency Indexes

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To: TechTrader42 who started this subject	5/8/2002 10:34:31 PM
From: ajtj99	Read Replies (1) of 1487

Well, the way we're going to find out if this is real or not is what happens on a re-test of the gap at COMP 1595. We can't move up for an extended rally without testing that gap. If we reverse on volume after getting close, touching, or getting partially into the gap, we know this is real and should get long. From looking over the other instances where this has happened, the upside potential of this move is 10% beyond the first close after the gap-up (see Feb. 2002, Jan. 2001). Capitulative lows like April 2001 and Sept. 2002 accompanied by high VIX/VXN numbers, strings of -1000 ticks, and put/call ratios well over 1.0 run 35-40% after the first up day. I'm leaning towards another 10%, with a test of NDX 1425 and COMP 1890 (1947).

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