I will show you exactly what gave me the utmost confidence to remain cautiously long during the recent bear run lower. I know a lot of people thought we’d bounce and there were 100 different indicators pointing to a rally just around the bend, but hardly any of those signals are repeatable.
These are.
Aside from the oversold signal, we also measure the percent of large caps ranked bullish. This number came in at an astounding 1.7% last week, which proved to be the absolute bottom. Last time we endured such bearishness was during the European financial crisis.
Our Hybrid Oscillators measure stress points for every sector. This is the predictive element of Exodus on a chart. Here is the SASS sector, at extreme lows. If you zoom out further, the last time it was this oversold was during the massive rout in 2014, which proved to be an once in a lifetime low for many stocks in the group.
The QQQ flagged a rare oversold last Thursday, also at the low point in the market.
SAAS stocks today, +6%.
Is this magic or guru level mathematical algorithms? Yes and no. There are some models that make up the algorithms that make it unique. No two algos are the same, after all. But, at the essence of what I’m trying to accomplish here is simply measure the stress points of the market and then see how traders respond to them. Certain levels are proven to be predictable, because, inherently, humans are predictable. We repeat the same processes and follow systems, in an orderly manner. You just need to pay attention to the patterns and then act upon them with confidence.
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I’ve noticed that Exodus has been pretty good at predicting short term bottoms. Can Exodus also predict short term tops that are actionable ?
Tops are very hard to time. It isn’t designed to catch tops or bottoms, merely measure the stress points and pick up patterns.
Short answer: yes
Thats some hot shit right thurrr!