Nasdaq Composite Index - Momentum Falter Redux   Tuesday, February 23, 2010
By Gibbons Burke
 The Nasdaq Composite index fell slightly on Monday, dropping 0.1% to close at 2,242.03. This is the first day of decline in seven days, and the two-day momentum is exactly flat at 0.0% after seven consecutive days of two-day momentum which has exceeded 0.75%. The index has gained 6.8% since making a low of 2,100.17 in the first week of February, but may be slowing down as it approaches the natural resistance level of the 20-day high of 2,262.27. Q: How has the Nasdaq Composite performed in the past when it has seen seven days of two-day momentum which exceeds 0.75%, but then has a day where the two-day momentum is less than 0.75%? A: According to the 30 previous occurrences of this event, EventEdge indicates that COMP has shown a somewhat bullish edge that peaks 13 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Monday, 22 February 2010) is Thursday, 11 March 2010. COMP rallies in 87% of the cases (26 of 30) by an average of 4.2% relative to the close on the event date. The average of the 4 declines is -4.3%. The overall return of the 30 cases is 3.1%, which, based on the close of COMP on the event date (2242.03), provides a target price of 2311.53. This is a redux idea first posted by Michael Carr back in July. See the related ideas below, which also includes a link to a bullish trading idea on the COMP index from last Friday. Gibbons Burke is editor of MarketHistory.com.
Related Ideas:
 |
| | Let variable values:
@ = NASD
theEvent = IF
2 value percent_move of NASD is more than 0.75
repeated for the previous 7 values
AND
2 value percent_move of NASD is not more than 0.75
THEN 1
ENDIF
Date Day t-2 t+1 t+5 t+10 t+13
09/10/1973 Mon -0.1 -0.5 0.0 3.2 4.7
10/16/1974 Wed -0.9 1.4 3.6 6.0 5.6
02/04/1975 Tue 0.5 1.3 1.0 3.9 4.3
04/18/1975 Fri 0.1 1.3 0.7 2.8 4.1
01/13/1976 Tue 0.1 1.5 3.0 2.8 5.6
09/19/1980 Fri 0.7 0.3 -2.3 -1.0 0.9
10/12/1981 Mon 0.1 0.3 -0.8 -0.1 0.9
08/30/1982 Mon 0.5 -0.7 1.1 3.1 4.3
10/15/1982 Fri -0.3 1.1 6.0 4.0 9.0
11/11/1982 Thu 0.6 0.5 -1.0 -1.2 1.8
01/18/1983 Tue 0.4 -0.6 -3.0 0.6 2.0
02/01/1985 Fri -0.1 0.8 3.6 3.3 3.1
01/16/1987 Fri -0.0 0.7 0.6 0.6 3.4
01/04/1990 Thu 0.0 -0.3 -2.3 -4.8 -6.3
02/07/1991 Thu 0.7 0.4 2.1 3.2 3.6
06/04/1991 Tue 0.2 -0.4 -2.1 -3.1 -4.2
01/13/1992 Mon -0.4 1.3 0.3 0.5 0.6
06/26/1995 Mon -1.4 -0.8 0.8 4.7 7.8
07/11/1995 Tue 0.0 1.9 1.9 2.4 3.6
01/26/1996 Fri -0.2 0.1 3.0 5.2 4.5
04/29/1996 Mon 0.3 0.2 -0.2 2.8 4.3
10/28/1998 Wed 0.7 1.1 5.0 7.2 7.2
12/28/1998 Mon 0.4 0.1 3.3 6.4 7.7
12/28/1999 Tue 0.1 1.7 -1.8 -1.3 2.3
02/11/2000 Fri 0.7 0.5 0.4 4.1 8.2
03/12/2002 Tue -1.7 -1.8 -0.9 -3.8 -1.8
08/23/2002 Fri -2.0 0.8 -4.8 -6.2 -4.7
06/03/2003 Tue 0.5 1.9 1.5 4.0 2.6
08/22/2003 Fri 0.3 -0.1 2.6 7.0 4.6
07/27/2009 Mon -0.3 0.4 2.1 1.2 2.1
02/22/2010 Mon 0.0 NaN NaN NaN NaN
Avg -0.0 0.5 0.8 1.9 3.1
AvgPos 0.3 0.9 2.1 3.6 4.2
AvgNeg -0.7 -0.6 -1.9 -2.7 -4.3
PctPos 64.5 73.3 66.7 73.3 86.7
PctNeg 35.5 26.7 33.3 26.7 13.3
Maximum 0.7 1.9 6.0 7.2 9.0
Minimum -2.0 -1.8 -4.8 -6.2 -6.3
StdDev 0.7 0.9 2.5 3.4 3.7
ZStat -0.0 0.5 0.3 0.6 0.8
Variance 0.5 0.8 6.0 11.8 13.5
31 Occurrences | |
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COMP