An Easy to Use Tool to Spot Potential Lows

I am Daniele Prandelli, and people probably know me for my work on Planetary Lines and cycles, which are very important tools, but I have many other weapons in my arsenal.

-  Daniele Prandelli

Today, I want to share with you an indicator that I have been using to understand the correct time for consider a buying opportunity after a severe drop in the Stock Market. To be precise, I do trade the S&P500 Futures. Last time I used this tool was around the second half of May 2022 (if we do not consider the one of a few days ago from the time I am writing), when I was SHORT and this Indicator helped me to understand to close the SHORTS and wait for a new bounce to SHORT again from higher levels (you can read here, with the details of the level I was monitoring to understand if we had to follow the uptrend or the downtrend, from a June 8, 2022 post: https://iaminwallstreet.com/new-uptrend-after-the-bounce-i-have-doubtsabout-it/).

The chart, or indicator that I am talking about today is called NASDAQ-LOWS in my EOD data provider list (I use Pinnacle Data Corp. from the website www.pinnacledata2.com, great and cheap, in my opinion). When I open it with my software, I get something like this:

How is this chart built? It is quite simple: it is based on the NASDAQ Exchange; when there is a Stock (between the over 3600 Stocks in the NASDAQ Exchange) that does a Low that is lower than any Low of the last year, the chart adds the value "1" to the data. For example, in March 2020, we see the indicator over the level 2000; it means that more than 2000 Stocks were making a lower Low than any Low of the previous year. Get it?

Well, studying this chart, I have noted that when we have it at the value 1000 or higher, it is very often the signal that the drop is about to end or take a pause, right on that day or in a few days. It is a way to measure when the fear gets an apex, or when we have an oversold situation.