Examining Market Tops: Nasdaq 1996
This chart of the 1996 Nasdaq correction looks very similar to previous corrections.Ă‚Â
From its intraday high in May to its intraday low in July, the market moved down ~20%.
Judging from reader comments, I need an operational definition of “leg down.” While I’ve not settled on one yet, I’m thinking that any period where the market does not make new lows can be considered a bounce, or consolidation, and when those lows are subsequently broken this would represent the start of another “leg down.” Up for discussion is how many days without new lows are required for a period to be a consolidation or bounce. I’m leaning towards 2 days.
One interesting development from this examination of tops is that the Stochastics consistently have nailed the bottom. Combining a Stochastics buy signal with a requirement for volume to be x% greater than the 50 day average when the signal occurs might make for a profitable way to play corrections.
Finally, I want to continue to emphasize that these moves typically come in waves (legs). The selling tends to dissipate after a capitulation day.
excellent work on previous tops.
Now, to top shit off, the mother of all tops: 2000.
Definitely, 2000 is a must.
However, there are many interesting tops out there. I plan to cover as many as I have data for.
any chance at the 1990 banking index?
Try overlapping it with todays bank index chart.
ownage.
I can’t find a 1990 BKX.
Maybe there is something else?
pull up old tickers, instead.
Big bank stocks.
just a thought c bac fnm fre len ctx
bearshitter.
Funny.
I’m more long than short, and banking coin today.
Bullshitter.
I’m just heckling.
I know. Still, didn’t want anyone to think I was losing money today. That would be just fucktarded.
If you include my long term positions, I am actually still net long too. But I’ve been accumulating longer term puts, and they are getting short term effed right now.