Jeff Saut of Raymond James in his weekend commentary talked about "90%" days and what to expect. based on what has happened since it is worth a reread:
That said, last Thursday qualified as yet another 90% Down Day (volume and points lost were greater than 90%). As the astute Lowery’s service notes, “This was the 2nd 90% Down Day within four trading days, and the 7th within the past three months. Past experience shows that 90% Down Days are typically followed by one of three patterns: (1) a 90% Up Day occurring quickly after the 90% Down Day would suggest that a sustained rally lasting about two or more months is likely; (2) the absence of a 90% Up Day during a snap-back rally would suggest that a brief recovery rally lasting 2 to 7 trading days would most likely be followed by new lows in price and additional 90% Down Days. Such rallies should be used to sell stocks; (3) the lack of any snap-back rally within a few days after the last 90% Down Day would suggest a sustained market decline is underway that will probably produce additional 90% Down Days.” Indeed, we think this is “kiss and tell” week and we continue to trade, and invest, accordingly.
I have not seen the stats for yesterday's big up day but even it it wasn't 90% it was big and worth noting. The market needs to follow through to the upside this week to encourage some more investors to jump in.
Raymond James | Investment Strategy by Jeffrey Saut
That said, last Thursday qualified as yet another 90% Down Day (volume and points lost were greater than 90%). As the astute Lowery’s service notes, “This was the 2nd 90% Down Day within four trading days, and the 7th within the past three months. Past experience shows that 90% Down Days are typically followed by one of three patterns: (1) a 90% Up Day occurring quickly after the 90% Down Day would suggest that a sustained rally lasting about two or more months is likely; (2) the absence of a 90% Up Day during a snap-back rally would suggest that a brief recovery rally lasting 2 to 7 trading days would most likely be followed by new lows in price and additional 90% Down Days. Such rallies should be used to sell stocks; (3) the lack of any snap-back rally within a few days after the last 90% Down Day would suggest a sustained market decline is underway that will probably produce additional 90% Down Days.” Indeed, we think this is “kiss and tell” week and we continue to trade, and invest, accordingly.
I have not seen the stats for yesterday's big up day but even it it wasn't 90% it was big and worth noting. The market needs to follow through to the upside this week to encourage some more investors to jump in.
Raymond James | Investment Strategy by Jeffrey Saut
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