Wednesday, July 22, 2009

Nasdaq: Short Term and Intermediate term buy

Last night I pointed out conflicting studies. The Nasdaq 100 closing up 10 consecutive days argued for a close higher in the ST, while the DIA streak as well as BKX divergence with the S&P argued for a lower close on the NYSE and S&P. The markets today followed those expectations, with the S&P and NYSE closing down, while the nasdaq closed up.

With the NASDAQ 100 and the NASDAQ composite having closed up for the 11th consecutive day today, i thought it would be worth to look at historical performances of the composite after such occurrences. There have been 20 p
rior instances where the NASDAQ composite has closed up for 11 consecutive days. As you can see from the table below, in 18 out of the 20 (90%) cases the NASDAQ was trading higher at some point in the next 3 days. Also notable, is that the market was trading higher 18 out 20 (90%) of the time 4 weeks later.
TickerDate/TimeStreakClosePctChg N1PctChg N2PctChg N3PctChg N10PctChg N20

This suggests that any dip over the next few days could result in a buying opportunity.


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