Searching For The Bottom

Investing Strategies Abandoned Arctic Outpost #13
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On January 3 - the first day of trading in 2022 the Nasdaq closed at 15,832. Today’s close at 13,716 represents a YTD loss of 2,116 pts or -13.3%. Here is a series of Nasdaq closing numbers:

Jan 3 15,832

Jan 21 13,768
Jan 24 13,855
Jan 25 13,539
Jan 26 13,542
Jan 27 13,352
Jan 28 13,770

After 6 consecutive days of closes below 14,000 the Nasdaq rallied to close above 14,000 for three consecutive days:

Jan 31 14,239
Feb 01 14,346
Feb 02 14,417

Feb 03 13,878

After Feb 3 the Nasdaq rallied to close above 14,000 for 5 consecutive days:

Feb 04 14,098
Feb 07 14,015
Feb 08 14,194
Feb 09 14,490
Feb 10 14,185

Feb 11 13,791
Feb 14 13,790

The market then rallied and closed two consecutive days above 14,000:

Feb 15 14,139
Feb 16 14,124

Then back down to today’s close:

Feb 17 13,716

What I am attempting to get to here, is that the 13,700 - 13,800 range, if not a bottom - then certainly is a battle ground ledge that so far we seem to bounce off of - with the bottom actually being the 13,350 area. Alternatively, the market is perhaps attempting to push lower with the Bulls putting up a good fight. Interesting to note that after our close today in the 13,750 area the Futures are positive.

While the pattern noted above may represent nothing at all - it is the primary reason that I felt comfortable adding today with the understanding that if the 13,750 area is merely a ledge - then any negative news could make it give way to greater losses. That said - thats why we then Hunker Down.

All the Best,

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What I am attempting to get to here, is that the 13,700 - 13,800 range, if not a bottom - then certainly is a battle ground ledge that so far we seem to bounce off of - with the bottom actually being the 13,350 area.

Interesting pattern, I guess we’ll know in a week or month if that was the bottom.

Mungofitch has a pretty good bottom detector. Unfortunately, his detector is not signaling a bottom yet. When it happens, he will post it on the Mechanical investing board.

An interesting blog: https://www.chrisperruna.com/2013/03/18/identify-market-tops…

In summary, he identifies the end of the bear market when there is a day without “New Lows”. This is not the exact bottom, but I would say it’s close enough.

This was for 2008-2009. Does it work in all bear markets? We’ll see. Yesterday, I have 23-178 for the NYSE NH/NL.

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Hi Jordrok:

Good post with some interesting insight.

I seldom visit other Discussion Boards with the exception of Saul’s and sometimes Dreamer’s. I usually reinforce that with the old ‘Too Many Chefs’ mantra - but the truth is time is valuable and I tend to focus only on places that augment my Growth strategy. Well…that and I am lazy - don’t scoff, it can be a gift.

I note that fairly recently Saul called a bottom that wasn’t and then in a post somewhere above this one Dreamer stated that he thinks the bottom is going to fall out in March. I admire both of those guys but the truth is that no one really knows when the bottom will be in. OK…maybe Dreamer does but he is something of a Fool outlier in that he tends to come up with his own stuff and is an independent thinker: The Gaul!

As for me - I’m just like the drunkard that stumbles into a well and is thrashing around in the dark looking for a way out. In truth - it seems to me that bottoms get put in when all the guys like us - that of the Growth us-es, stop buying the dips. That is to say give up the ghost and just lay around in the sun gasping and praying for rain.

Anyway - thought you had a good post and wanted to tell you I appreciated it.

All the Best,

Note: If you have a little time this weekend - go to a local grocery store and pick up a couple of cans of Dinty Moore Beef Stew and drop them off at your local food bank. Hungry families will appreciate it and you’ll feed good doing it.

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Oh - I forgot that I take a look at Ears board from time to time as well. Ears is one of those smart guy independent thinkers as well and his board is rock solid. Not flashy - but rock solid in its theory and application. Might as well pitch in that if you visit Ears board then you ought to be caught up on Bessemer Venture Partners work as well. It’s sort of an Every Mans Guide to Ears Investing Theory. Or something like that.

All the Best,

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Hi Champico,

Could you give me the name of Ears’ board? Thanks!

I’ll try to remember to come ring a bell here when Mungo’s detector start beeping.

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Jordrok:

You can find Ears at Carefree Cloud Investing.

All the Best,

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Mungo’s bottom detector is saying hello, but it’s not a major signal:
https://discussion.fool.com/my-short-term-bottom-detector-trigge…

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