Potential Sell Signal - Pure "90% Days"

By Lawrence G. McMillan

We keep track of “90% days” with a great deal of accuracy.  A “90% up day” is, in its purest form, a day when advancing issues outnumber declining issues by at least a 9-to-1 ratio and advancing  volume outnumbers declining volume by at least a 9-to-1 ratio.

A “90% down day” is just the opposite – where declining issues and volume must outnumber advancing issues and volume by a 9-to-1 ratio or more.  For the purposes of this article, let’s designate this type of “90% day” as a “pure 90% day.”

A less stringent criteria is that of a “90% volume day,” where only the volume component is necessary to register a “90% day.”  These are rather rare occurrences, especially in terms of NYSE data, where there are a quite a few non-stocks included in the issues traded.  In terms of “stocks only” data – which, by our definition, means all stocks with listed options – these are more frequent.

Recently, I prepared a slide for inclusion in the paid Intensive Option Seminar that is being presented at the Online Traders Expo in Las Vegas, on November 15th.  That slide encompasses the totals of the various kinds of “90% days” since 1994.  “90% days” have been far more frequent since August of 1998, when the financial crisis exploded...

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