This entry was posted on Monday, November 12th, 2007 at 8:02 am and is filed under chart patterns, fun, market commentary. 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.
In doing some research to show that not all high volume reversals are the same (one’s after fear are better) I came across a stat that just blew me away. I scanned for days with volume being greater than the previous 22 trading days and the day was up greater than 1% from the previous days close in the SP-500.
Since 1966 we have had at least 160 days that this happened or about 8 times per year. A fairly common event. As a matter of fact we have had at least one happen every year since 1966 without any years skipped. Well not every year. As a matter of fact we have not had one happen in a while.
Here is my challenge to you. Can you find that day for me? The last trigger in the SP-500? Put it in the comments if you find it. If I do not get an answer today I will post the stunning answer tonight. The first to get it correct gets my copy of “There Must Be A Pony In Here Somewhere” by Kara Swisher about the AOL - Time Warner debacle.
Have a Great Day!
Dave Johnson
November 12th, 2007 at 8:08 am
August 8, 2007
November 12th, 2007 at 9:24 am
Jack August 8th had the proper price move but was exceeded in volume by July 26th.
November 12th, 2007 at 10:46 am
Aug 16 is the correct answer.
Do have question for you Dave. So once a high volume reversal happens you will be looking for 4-5% bounce. I am curious if that figure is calculated from closing price day of reversal or from the ultimate bottom. Could make a substantial difference.
November 12th, 2007 at 10:54 am
Absolutely. The system is to buy the open following the large up day. And the 4-5% target is from that opening price. Check out the charts. You can click on them to see them more clearly.
This stat thing is something entirely separate from that system trade. Just a bit of fun I found along the way. Cmon who can give me the last 1% up day in the SP500 accompanied by the highest volume in the past 22 days?
November 12th, 2007 at 11:08 am
I pulled my stats from yahoo! and ran the following equation on the cells:
=AND(G14584>(G14583*1.01),F14584>MAX(F14562:F14583))
If that isn’t right perhaps the data at Yahoo! is incorrect. No big deal. I thought it would be fun to chime in.
November 12th, 2007 at 11:10 am
Second guess would be 09/12/06, but then again I’m using yahoo! data.
November 12th, 2007 at 11:12 am
No problem at all Jack. Thanks for contributing. I have checked various sources. The vol on the the 8th was below that on July 26th.
Trust me you will be surprised by the last time…
November 12th, 2007 at 11:23 am
9/12/06 not even close on the vol (not even above previous day)….Damn that yahoo data
November 12th, 2007 at 12:50 pm
I attempted to answer the question. For the high volume bullish reversal the most obvious date is Aug 16, for the high volume bearish reversal the most obvious date is Oct 11. Both instances marked the extremes of the recent trading range.
November 12th, 2007 at 1:10 pm
No August 16 is not the answer….
Market was not up 1% that day.
Big reversal from bottom. But not up 1% from previous close. S&P was up like 5 points that day.
November 12th, 2007 at 2:33 pm
11/04/04? using $INX
November 12th, 2007 at 2:36 pm
Brig you got it! Imagine that we have not had a 1% up day with volume the highest of previous 22 days - in over 3 years. Amazing considering the run we have had. I will email you to get the details where to send the book. Congrats.