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Strategies & Market Trends : Tech Stock Options

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To: Cynic 2005 who wrote (26832)10/24/1997 1:51:00 PM
From: Tom Trader  Read Replies (1) of 58727
 
Hi Mohan-- thanks for the alert

I noticed that you stated on the Big K thread that if the new lows exceed the new highs on two more days over the next five days, it is a warning sign for a more significant "sell-off". I can certainly see the logic of this being a warning sign -- because it is an indication of stocks breaking down. But have you back-tested this over any period of time or is this more a gut feel of what you have seen happen in the past. Also how much of a decline do you anticipate based on this indicator and does the reverse hold true as well. In other words if the new highs exceed the new lows over three days does that constitute a buy signal?

Regards
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