As a simple strategy, the question is "what is the likelihood that a stock hitting a 52 week high will reverse?". The odds are that today was not the ultimate top. Many stocks that reach a 52 week high, do so by advancing past a lower 52 week high the day before. What would be interesting would be statistics on how many consecutive days of new 52 week highs the average stock will show before hitting a ceiling and starting back downward. There might be some kind of reliable pattern in this.
Just read trough the whole thread (had nothing to do while moving some data around which takes forever. Ronbgelf, thanks for the link, dude! Laughed so hard my stomach hurts Maybe I should look through chit-chat section more often... Peace.
??? WTF? Who in there right mind would ever consider taking <b>ANY</b> position unless they had a VERY GOOD idea where it's gonna head next, regardless of the trading horizon.
Hmm. And you are bragging about your grad degree. Setting a new 52 week high does not have to imply any momentum. The stock might have been chopping back and forth, the new high per se is thus meaningless.
Underlined the parts I would like to comment on: 1. This was the actual claim that started the thread, as will be clear for anyone who clicks the link: "I have 53 consecutive profitable trades of 15% or higher since January 2001." So, MrMarket didn't say: "consecutive WINNERS", he said "profitable trades". It is not uncommon to consider only your closed trades as winners or losers. As in remarks like: the only gains are the gains that you actually pocket. 2. Given that MrMarket only has 14 positions maximum open at any one time, these 53 positions are at worst 53 from 67. But I'll admit that this requires that you actually look at what he is doing, which obviously is too much trouble for a lot of people here. Regards, Karel
I just looked at my own results with the MrMarket method. Considering all my positions, open and closed, I currently stand at a 6.7% loss from exactly one year ago, when I started to follow MrMarket's picks. I also developed a clone of his method and used those results in my port too, so this is not a real MrMarket result. With SPY down 22%, QQQ down 34%, and DIA down 18%, I feel I haven't done too badly. Perhaps I am easy to please. Regards, Karel
I stand corrected - there were some new 52 week highs yesterday, but certainly not hundreds. How about reversing some of this for a bear market strategy. Looking for the most likely fallers? Natalie
OK, trash that claim! Call it a point, even. But what are we talking about with over 200 stocks with a price over $5 making a new high in the last week? (Source: Moneycentral screener) BTW, Ernie is a bit more critical, so of these 200 only some 9 would have made his universe, according to my approximation of his method. The 9 that passed my version of his first screen are: JBSS, CHCO, EASI, IMH, SFFB, BLI, FFFL, QTRN, and FBF. Regards, Karel