Current January 20 Lowry's Up / Down Volume Ratios for
$SPX, $NDX and $RUT:
pbs.twimg.com
60-minute charts
Message #1149 from rimshot at 1/18/2023 6:01:11 PM
Lowry's Up / Down Volume ratio did NOT decline during January 18
trading day to the negative 90 level
for: $SPX - $NDX - $RUT ...
** bears need to see a further decline to
or below the negative 90 level in future hours or days
to avoid upward bounces which may have decent legs
===================================================
quote from Paul Desmond PDF -
1. A single, isolated 90% Downside Day does not, by itself, have any long term trend
implications, since they often occur at the end of short term corrections. But, because
they show that investors are in a mood to panic, even an isolated 90% Downside Day
should be viewed as an important warning that more could follow.
2. It usually takes time, and significantly lower prices, for investor psychology to reach
the panic stage. Therefore, a 90% Downside Day that occurs quickly after a market
high is most commonly associated with a short term market correction, although there
are some notable exceptions in the record. This is also true for a single 90% Downside
Day (not part of a series) that is triggered by a surprise news announcement.
3. Market declines containing two or more 90% Downside Days often generate a series of
additional 90% Downside Days, often spread apart by as much as 30 trading days.
Therefore, it should not be assumed that an investor can successfully ride out such a
decline without taking defensive measures.
4. Impressive, big-volume “snap-back” rallies lasting from two to seven days commonly
follow quickly after 90% Downside Days, and can be very advantageous for nimble
traders. But, as a general rule, longer-term investors should not be in a hurry to buy
back into a market containing multiple 90% Downside Days, and should probably
view snap-back rallies as opportunities to move to a more defensive position.
5. On occasion, back-to-back 80% Upside Days (such as August 1 and August 2, 1996)
have occurred instead of a single 90% Upside Day to signal the completion of the
major reversal pattern. Back-to-back 80% Upside Days are relatively rare except for
these reversals from a major market low.
6. In approximately half the cases in the past 69 years, the 90% Upside Day, or the back-
to-back 80% Upside Days, which signaled a major market reversal, occurred within
five trading days or less of the market low. There are, however, a few notable
exceptions, such as January 2, 1975 or August 2, 1996. As a general rule, the longer it
takes for buyers to enthusiastically rush in after the market low, the more investors
should look for other confirmatory evidence of a market reversal.
7. Investors should be wary of upside days on which only one component (Upside
Volume or Points Gained) reaches the 90.0% or more level, while the other component
falls short of the 90% level. Such rallies are often short-lived.
8. Back-to-back 90% Upside Days (such as May 31 and June 1, 1988) are a relatively
rare development, and have usually been registered near the beginning of important
intermediate and longer term trend rallies. |
