According to research from Lowry’s, important market bottoms are formed when we see 90% of the points and volume in the market decline, followed by the reverse (90% move up). These are called 90-90 days for short. Read Lowry’s full report (Charles Dow Award section, titled “Identifying Bear Market Bottoms & New Bull Markets”).
On July 26th 2007 we had a 90-90 down day and Friday I think we had or came very close to having another 90-90 down day.
On the NYSE, 82% of the issues decline while declining volume was 94% of total volume.
During the last intermediate bottom, Nasdaq breadth reached -2000 three times but it also popped above +1500. To complete this script, we now need to see a 90-90 up day. As I explained before, trends seem to require these wide range days in breadth.
Until we get such an extreme up day, the bears will have the upper hand in the market.
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