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Nobody knows when the slide will end. If we see any form of a turnaround tomorrow, CNBC will be stacked with talking heads calling it a double bottom. Could be, but the odds favor more downside. [...]
Its hard to believe that only eight trading days ago, the Dow was at fresh all-time highs. While there were plenty of market skeptics, nobody anticipated such a dramatic and quick fall. Now a return to last week’s levels or a second, equally-violent move down both seem impossible — which of course [...]
How bad was yesterday? By my measure, which nets out the breadth on the Nasdaq and NYSE exchanges, yesterday was extremely bad. Time will tell whether it was capitulation, but my combined breadth figures for the last two hours of the trading day were both under -4500. This chart shows the combined [...]
1. Sell in May and go away?
That maxim may test well for the broader market, but microcaps have different seasonal tendencies. Here are the annualized microcap returns by month from July 1926 to December 2004, courtesy of Dartmouth’s Kenneth French and University of Chicago’s Eugene Fama:
January………159.82%
February………25.10%
March……………1.21%
April…………….12.86%
May……………….6.85%
June………………6.57%
July……………..22.64%
August………….8.16%
September…….-7.75%
October……….-14.60%
November……….7.97%
December………-1.94%
Unless the broader market falls apart, any [...]