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B4 The Bell Wednesday March 10


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How did stocks react to a two days of a Trin of 3 during the bear (2000-2002)?

Stained,

 

FWIW, I have a post it note above my desk with the following trading rule that I picked up from a friend a while back:

 

Closing trin >3 - buy next day

>4 - buy immediately

2 consecutive days > 2.5, buy next day.

 

However, in real life such extreme readings don't come by very often, and bears would do well to be careful after today's sell-off.

 

I personally don't trade on this basis, but I do like to look at it.

 

My own trin data goes back to May 10, 2000 and I only saved EOD readings. But a quick glance at the data shows four consecutive >2 readings, all of which led to big bounces (>2%), the next day on 3 occasions and 2 days later on one.

 

The dates were:

29/30 October 01 (2.05, 2.17)

20/21 Jun 02 (2.3, 2.09)

1/2 July 02 (2.09, 2.63)

9/10 July 02 (2.79, 2.12)

 

It's probably worth putting a little more analysis into the data, however. It could be that other factors came into play to cause the bounces, not just the trin.

Much appreciated, Madame.

 

If we go down hard in the AM tomorrow, I plan to take a few chips off the table. Could get a short-term selling climax. Your >2% bounce on the Spoos (>3% on Nasty) fits in well with my expectation that this trendline gets tested from below fairly soon.

 

Brian, you're much better on the short-term. Waddya think?

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Guys and Gals-I expect tomorrow at best a modest rally at worst a continuation down, things HAVE CHANGED-I don't question change. The rally was relentless and took no prisoners, T/A was useless alls I know is i got 30 points locked-that they aren't getting and I am going for more. I sense normalcey returning and i know the fundamentals that have propped up this pos are dissolving. The economy is a crispy critter the Idiot Prince can stand on his head and spit nickels but JOBS are not there, exports are not there and the deficit is THERE.! ;)

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