Last week ended on quite the down note. Friday’s big selloff saw the Dow Jones Industrial Average drop 2 percent, or 318.2 points. The Standard & Poor’s 500 Index fell 2.1 percent (38.2 points), while Nasdaq Composite Index declined 2.2 percent (90.7 points).

The technically significant issue was that Friday was a 90/90 day — more than 90 percent of the volume (94 percent) and of the points (97 percent) was down.

A brief explanation for those of you who may not be so technically oriented: When markets experience a bout of intense selling — those trading sessions when 90 percent of the volume is down, and nine out of 10 stocks close lower — it can mark a short-term reversal in a bull run. Typically, it signifies a shift in psychology among larger institutions.

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Category: Technical Analysis, Trading

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3 Responses to “Friday Was a 90/90 Day. What That Means”

  1. [...] I say serious because the “correction” of last week was more than a correction. Barry Ritholtz called it a 90/90 day, when more than 90% of the volume and 90% of the stocks are [...]

  2. waka says:

    whats the meaning of ‘ 90 percent of the volume is down’ ? Does that mean instead of daily average of 100 stocks only 10 stocks traded on exchanges?