lovevictoria

The following article is from yesterday, but it is interstersting. no harm to read.

wenxuecity 2009-09-29

Tomorrow will go up, history says so, I dare not believe it.

All three major indexes are down 21% or more so far this year, whichmakes this year, 2008, the worst YTD yield since 2002. All mutualfunds(except those bond based) in my 401(K) plan reached new 52-weeklow today. Without magic, tomorrow will not put the 3rd quarter ingreen. Based on DJI, it's the 4th quarter down, the longest since 1978.From 1977 all year to 1978 1st quarter, DJI was down 5 q's. AmongSP500, only CPB is up today, 499 dropped, 92% dropped 3% or more. Amongexpanded SP500(defined below), 163 stocks hit new 52-week low, higherthan 7/15/2008.

Historical data says tomorrow will go up, I dare not believe it(I did load, though). But I just want to share it anyway.

Here are the top 11 biggest down days in DOW30 history. The next day, 9up(including three times this year), 1 down, tomorrow will be MyWish.

Date        Price        Change        Change(%)        Next Day(%)
9/29/2008        10365.45        -777.68        -6.98        MyWish
9/17/2001        8920.7        -684.81        -7.13        -0.19
4/14/2000        10305.77        -617.78        -5.66        2.69
10/27/1997        7161.15        -554.26        -7.18        4.71
8/31/1998        7539.07        -512.61        -6.37        3.82
10/19/1987        1738.74        -507.99        -22.61        5.88
9/15/2008        10917.51        -504.48        -4.42        1.3
9/17/2008        10917.51        -449.36        -4.06        3.86
3/12/2001        10208.25        -436.37        -4.1        0.81
2/27/2007        12216.24        -416.02        -3.29        0.43
6/6/2008        12209.81        -394.64        -3.13        0.58


Based on my home-made index(see below), the possibility of going up Tuesday is still high.
Among expanded SP500(SP500 plus a few sector index funds, like DIA,QQQQ, SPY, XLE, OIH and RIMM), 87 stocks closed at daily low. Here isthe result based on one indicator(Rebound Index: GSPC will go up ordown vs the number of stocks closed at daily low among SP 500) since2007:

        If the number of stocks closed at daily low is:
         >= 30:  occurred 46 times, the next day is up vs down: 33 vs 13, average up 1.11% vs down 0.96%;
          (>= 75, occurred 18 times, and the next day is up vs down: 16 vs 2, average up 0.96% vs down 0.41%)

Today, 87 stocks closed at daily low; Let's see how it goes tomorrow(up is expected based on rebound index as defined above).
This year is a little bit disappointing, only 60%(12 : 8).

Actions:
========
- Loaded mutual fund at 8-9% discount based on sell price of Thursday. Amount: about 3K(60% of this year's gain);
- Loaded MSFT at 25.01(weird, my orders at 25.31, 25.11 were notfilled, but orders at 25.21 and 25.01 were filled at 25.01. No stoploss order yet, will decide tomorrow.)

Disclaimer:
1. Just for fun, no personal opinion, trade at your own risk.
2. I wrote this post before reading any recent post from anyforum(except data collecting from yahoo). If there is anyrepeat/duplicate, it's pure coincidence.
3. Different people have different interpretations even on the samedataset. Different opinions are expected and welcome to share, nopersonal attack.