The intra day market reversals have reached highest level since 1987 August – the failure of bull rallies can be catastrophic
Sam Adelton
Mar. 10, 2007

Intra day trading is not easy. But it does provide the smart money some clues to the market internals. Before any major crash in the market or massive sell offs, the intra day bull market rallies start failing. Analytics that count the number and intensity of the failures of bull conviction provide guidance for the market players with what is really coming in the next few months or quarters.

The failure bull rallies within the same day trading intensified in 1929, 1946, 1962, 1987and 2000 just before massive market declines. It was very prominent in late eighties in Japan when Nikkei topped out. P> Interestingly, these reversals are more prominent in emerging nations’ stock markets. The highest is seen in Indian stock market.

These failures of bull rallies signify frustration and draw down on liquidity of the resources of the bulls in the market place. The effects are catastrophic on the long run. The bear market after that does not find bottoms.

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