Category: Myths

Optical Illusions

In August 1987, the Nasdaq 100 was extremely overbought. In July 1998, the Nasdaq 100 was extremely overbought. In January 2000, the Nasdaq 100 was extremely overbought. In October 2007, the Nasdaq 100 was extremely overbought. The Nasdaq 100 is extremely overbought today. Sell everything? If only it were that simple. When looking at the […]

New Highs, New Lows, New Noise

“A large number of new 52-week highs is very bullish. A large number of new 52-week lows is very bearish.” – Pundit Pundits make these statements with conviction. Conviction, we are told, is a good thing, regardless of whether it is based on fiction or fact. New highs, they scream, are bullish. New lows, they scream, […]

We’ve seen a lot in the last two weeks: Manias, Panics, and All-Time Highs. Manias Dry Ships Inc. (a shipping company) went from $4 to $102 in 4 trading day following the election, an astounding gain of over 2,000%. There were a wide variety of reasons attributed to the advance (Trump is bullish for growth/shipping, […]

After declining for 9 consecutive days, the S&P 500 rallied over 2% this Monday (November 7). It was an unusually strong day where over 90% of the total volume in the NYSE was volume in advancing shares, a so-called “90% upside day.” Such days are rare historically, occurring less than 1% of the time since […]

Interesting vs. Actionable

“Distinguishing the signal from the noise requires both scientific knowledge and self-knowledge.” – Nate Silver Records are made to be broken. We saw that in spades last week. For the first time in history, the S&P 500 declined 9 days in a row while the Volatility Index (VIX) rose for 9 straight days. The S&P […]