Tuesday, September 9, 2008

Strategy, sign of the times, or contrarian indicator?

If there ever was a time to test the shorting into weakness strategy, it's now. Earlier, I indicated that BFRM might be a good short- that was based on the fact that the end of day selling looked panicked. BFRM went down some, but ended up rebounding so the eod sell there wasn't indicative of anything. In science we call that an n=1. For Wed. we will take a larger sample size:

ICO BQI IAR CPST RDN MTG ESLR LMC PBY

Of course this slightly larger sample size may still be only indicative of focalized market conditions. But let's look at the stats and set up a repeat experiment in the future.

Tests like these make me realize how difficult it is to come up with consistently winning strategies. I could spend 43 years trading before I come up with my own that work. Best use his.

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