Stocks Appears Set For A Rebound Attempt (but probably more choppy volatility in the next few weeks) 10-12-22

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Currently stocks are in an interesting position.  SPY and QQQ hit new 52 week lows, but small caps and NYSE did not.  

There is a stark bullish divergence in breadth (Mclellan oscillator, etc).  

So between the non-confirmation and bullish divergence in the internals, it appears possible for a substantial rebound to occur soon.

However, on a pure price backtesting basis I have looked at different criteria combinations as price makes a 52 week low, and the results are NOT universally lopsided to the bullish side right now.

However the above shows the case where a 52 we lows is made with 4 or more closes down in a row.  I was a little surprised to see how bullish the skew was over the intermediate term.  So in the past that type of action has been somewhat exhaustive selling pressure.  So this is a bullish argument.

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This table shows times when both the 14 period RSI was in a bullish divergence at a 52 week low AND then 2 period RSI was less than 10.  So it incorporates a longer term extreme sell off and loss of momentum with a shorter term extreme sell off.

Again the results here are bullish, but the skew is more notable in the first 3-10 days.

I am not going to post other data here, but in the longer term a new 52 week low is a bearish skew as it confirms the downtrend.

And without a low or close below the bollinger band, a 52 week low is not as notable for a bullish rebound.

I have elected to highlight the bullish studies above, because on the balance of everything I am looking at, it appears the next 5-6 days would more likely be bullish than bearish.   But I do not view it as an extreme high probability occurrence right now.