This entry was posted on Sunday, July 29th, 2007 at 4:08 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
One indicator I look at to view the relatively level of oversold is the T2108 included in Worden’s Telechart product. The T2108 indicator shows the % of NYSE symbols that are above their 40 day MA. On friday, it had a value of 14.86, it’s lowest reading since May of 2004.
Curious as to how these days play out. I did a quick screen to buy at open the day after the T2108 value is < 15 and then sell 3 days later on the SPY since 1988.
Here are the statistics:
As you can see, 78% of the trades are winners, with an average profit of 1.47% of the next 3 days. Interestingly enough, the largest loser was not from 9/11, but from 1998 when the credit markets experienced extreme turbulence. Here’s the chart showing buys and sells from that period and just how steep that 1998 decline was.
- John
July 30th, 2007 at 3:43 pm
WHERE IS THE FUCKIN CHAT ROOM? YOU GUYS LOSE ALL YOUR MONEY IN THIS MARKET CRASH. HOW ARE THOSE FUTURES SWING LONGS TREATING YOU?
July 31st, 2007 at 9:01 am
Are you serious dude? Take a deep breath…….ok now exhale slowly.
August 3rd, 2007 at 11:02 pm
[...] my post last weekend, I mentioned how the T2108 was < 15 and provide results of a system that bought at [...]
October 11th, 2007 at 3:41 am
Hi, This is a pretty cool blog on Extremely oversold! Thanks a lot and have fun!