Saturday, March 24, 2007

Pray For Rain

I was over on Dogwoods site and it's worth the trip if you haven't been there before and I was looking at a couple of stocks that his filters had output and this one caught my eye -

So I was looking at it and looking at it and saying to myself that its way too late to get into this guy - you would have wanted to get into it back on February 28th - when all of a sudden that date rang a bell. I realized that this stock had gone up and finished up on February 27th and how priceless is that?

So then I started thinking - how many stocks in this class did the same thing and how are they doing today? So I wrote a modified gap up filter that would catch this one and all of its little friends and output them for February 27th and here they are -

And it doesn't take a rocket scientist to see that there was a lot of appreciation out of that class of stocks that day. And the neat thing is all of the losers would have been gone long before they reached their current loss levels.

The really really really interesting thing is that the filter that found this set back tests at a -3% ROI so it is pretty bad most of the time. But give it a good down day in the market and it will find gold.

Moral of the story - pray for rain and harvest the flowers that spring up afterward.


Woodshedder said...

Interesting...and very good filter idea!


The rain will come.