Monday, January 23, 2017
Joined Nov 11, 2007
1,458 Blog Posts

Eat, Drink, and Be Merry, for Tomorrow We (Might) Bounce

Based on my breadth indicators, we are nearing breadth readings that typically signal a bounce is near. We are not quite there yet.

I want the green Decliners Indicator to be above 90 and the red Number of Stocks Above Their 5 Day Moving Averages to be much closer to 800.

However, we are in a period of positive seasonality, as evidenced by this recent post from Quantifiable Edges: Twas 3 Nights Before Christmas (Again). And here is another study that finds similar results: The Christmas Trade.

Because the market is nearing oversold and there is positive seasonality, I think a bounce is likely. Surely with the President on vacation and Congress shut down the market can forget about the Fecal Cliff for a day or so? For Santa?

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  1. goggle

    hey wood, can u do a ytd backtest on the moving average signal?

    buy spy when above:


    just curious if they beat buy and hold this year. I think you’re familiar with them. thanks

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  2. Woodshedder

    That shouldn’t be a problem to backtest. I’m curious. Do you think the results will beat buy and hold, or not? I’m curious too.

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