Skip to main content
No. of Recommendations: 19
Would you mind refreshing my memory of your top and bottom indicators?

As mentioned in the prior post, my top indicators are pretty bad.
They depend on bad breadth within a few days either way from a market high.
It often gives 2-3 bad signals for every useful one.
This graph shows it up to around 2017

The bottom detector is pretty good, by comparison.
It relies almost exclusively on very bad breadth.
To make a long story short, tons of new lows on the same day that you've seen very few new highs for a few days.
It tries to identify days that are so bad it's good: widespread capitulation selling.

There are two quite different versions.
The short term signal is frequent and not that fantastic, predictive for 1-4 weeks.
Last signal was August 19, perhaps surprisingly.
The major bottom detector has proved pretty valuable. Its signals are rare but have held up well.
Last signal was 2020-03-23.
A year after the signal date the market is up about 20% on average.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.