Comments on: Sentiment Overview: Week Of December 7th 2007

by: Nasdaq vs. NYSE Volume Ratio: Spike Low | yahoo web hosting

Thu, 17 Apr 2008 14:45:25 +0000

[…] The previous time I mentioned the Nasdaq to NYSE volume ratio, it had just signalled (correctly) that October 2007 brought with it a very high probability of a top. […]

by: Nasdaq vs. NYSE Volume Ratio: Spike Low

Fri, 28 Mar 2008 02:42:08 +0000

[…] The previous time I mentioned the Nasdaq to NYSE volume ratio, it had just signalled (correctly) that October 2007 brought with it a very high probability of a top. bear market, big board, fear and loathing, market bottom, Nasdaq, Nasdaq volume, NYSE, NYSE volume, stock exchange, volume ratio […]

by: Johan

Tue, 11 Dec 2007 20:08:33 +0000

Well, I think does things are the same thing or different sides of the same coin if you prefer.

When things sounds too good, people crowd in. When things sounds bad, people shy away. That’s lopsided crowding.

And most of the times when one scrutinize these seemingly logical, common sense hyopothesis they rarely give the output predicted.

There’s another saying (there are many wise sayings out there), that markets are wired to do as much harm as possible to as many people as possible.

That’s why John Doe always either lose or underperform. And it’s only a small bunch of people that take care of most of the winnings.

Well, that’s how I see it.

Now again we saw the markets rise into the FED meeting. I think there is actually a statistical significant winning to do buying before these meetings. That makes perfect sense in my contrarian view. When people are likely to have already sold stocks, it must be a good buying opportunty.

May the odds be with us in our next trade!
J

by: Babak

Tue, 11 Dec 2007 19:16:08 +0000

Johan,
contrarian analysis isn’t about what sounds good or bad, it is about a lopsided crowding one way or the other. At least, that’s the way I approach it.

by: Babak

Tue, 11 Dec 2007 01:36:13 +0000

Thanks gosu, that was a great call
Glad you made some money on it.

by: gosu

Mon, 10 Dec 2007 18:20:33 +0000

I still believe the best indicator so far has been:

Ratio of % of stocks above their 50 day moving average/Ratio of % of stocks above their 200 day moving average.

This has been proven in this post.
http://www.tradersnarrative.com/timing-the-market-with-above-ma-ratios-32.html

This ratio went to about 0.6 around November 16.

Thanks to you, I was ready to jump in.

by: Johan

Mon, 10 Dec 2007 16:07:35 +0000

Babak oh Babak! Since when did “it sounded good” give contrarians an edge? Aren’t we looking for what sounds bad? And fade what others think sounds good?

I’m definately not saying that you are wrong, coz I don’t have any research to back it up with, but from a contrarian view “what sounds good” usually sounds bad.

The obvious is rarely obvious, and common sense is not so common.

Johan

by: Babak

Mon, 10 Dec 2007 15:38:45 +0000

Johan,
thanks for calling me on that. I don’t have any empirical evidence to back it up (including the “probably”) but it sure sounded good, didn’t it?

by: Johan

Mon, 10 Dec 2007 12:48:34 +0000

“Although a 25 basis point cut is baked in, until we get confirmation, the market will probably not trend.”

Is this really a fact that markets won’t likely trend before major news? I hear this all the time but haven’t seen any emperical proof for that.

In fact major news are not even likely to change a trend (according to my own experience). Markets seems to go the way they want most often, and major news only changes the volatility not the trend.