Augie: Good thinking using the charts on top of the sanpshots which can miss some things.
One thing I have noticed that in order to confirm a nasty downtrend, another 90% down fairly close in time (relatively speaking) is a confirmation especially if it is at a lower low. Last summer is a good example.
Most 90% down day readings this year and last year (last chart)at least signal more down to come either short term or as part of a larger trend. August rally is an excpetion last year but the oversold state then does not exist today. You can see that in December and even in March, there was more down to follow after bounces. In the summer of 2001, down was minimal downside and preceeded good sized bounces although lower highs were made with each bounce.
Now if the reaction off the 90% down day is a bottom and immediate up and a higher high (maybe even a 90% up day thrown in there), you have a bull market correction.
As a footnote, I wonder out loud how many of these down days took place during opex week.
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