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Livermore Active Issues Index for Friday, July 9th

July 9, 2010

2 Comments leave one →
  1. Dave Svilar permalink
    July 10, 2010 12:03 am

    DV,
    Interesting to note BIDU dropping out of the top 10 while LINTA continues to hold the top spot despite being what most would consider a “broken stock.” Meanwhile BIDU has held its own even though its price action has been more erratic. I’m assuming that LINTA has held atop the rankings because of a very high LTR score (even if that “trendiness” is in the wrong direction). At this point I see LINTA as a stock that is leading the market downward, and can be seen as a good indicator of market direction but not one I would consider trading. Am I on the right track? Comments?
    Cheers, Dave

    • david varadi permalink*
      July 11, 2010 12:56 pm

      hi dave, that is correct–and interestingly enough what we found was that filtering for stocks like BIDU versus ones that were “breaking down” did not improve performance over the long run—in fact for large cap stocks it actually hurt performance. ie the price/52-week high, or even 60 or 30 day highs. in the case of mid cap and smaller cap stocks this was definitely not the case. with smaller/less liquid stocks, the nearness to a short-term or long term high improved returns and reduced risk–likely because liquidity is more sporadic in these names and everyone tends to buy and sell at once.
      great comment
      cheers
      david

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