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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: dennis michael patterson who wrote (1970)	12/15/1998 8:53:00 PM
From: HighTech	Respond to of 99985

I am not a statistician. Isn't there some way to determine whether or not there is predictive validity by regression analysis? Aren't there other tests as well? I don't know. I just eyeball and look for patterns. I think major bottoms are easy to spot. Just have enormous volume and a remarkable turnaround near the end of the day. Look at any major bottom and you will see this. It's also the least likely time for anyone to buy because the market has fallen so much that the fear of the market going lower stifles action. It's also good to see the VIX above 50 on that day. We had two of those days, the last ending on October 8, the first was followed by a rising flag on low volume. This gave some indication that the downside wasn't finished. Stronger and more sustained upmoves coupled with heavy volume, such as the one from October 8, give a better indication of a new trend. This is all in hindsight of course. But I think it's a valid way to detect (or be fairly close) to bottoms. FWIW HiTech