Guide · Mean reversion
Does DeMark 9-Count work?
Across 375 stocks, DeMark 9-Count cut the worst fall on 94%, beat buying and holding on risk-adjusted return on 17% and on raw return on 13%. Mainly a seatbelt: it softened the big falls on most stocks, but usually gave up return to do it.
What it predicts
Count closes below the close four days earlier. Nine in a row marks a selling streak that is likely spent.
- In when a buy setup completes: 9 straight closes below the close 4 days earlier.
- Out when a sell setup completes: 9 straight closes above it.
Mean reversion plays bet that short, sharp moves tend to snap back. The family guide
How to use it
- It's right often (62% of calls), but check the size of the misses: a high hit rate can hide a few large losses.
- It sits in cash much of the time (holding on about 40% of days), so judge it on risk-adjusted return rather than on matching a rising market.
- It worked best on Micro caps (67% beat holding on risk-adjusted return) and worst on Financials (0%).
- Use it as one input. Your signal combines the plays you count with the other factors you weight into one call.
When it worked
DeMark 9-Count did best against holding in the 2008 crash (+12% median gap) and worst in the 2020–21 rally (−24%). Median gap in return against holding the same stock (per year over stretches longer than 18 months; crypto excluded).
| 2008 crash | Recovery 2009–19 | COVID drop | 2020–21 rally | 2022 bear | Since Oct 2022 | |
|---|---|---|---|---|---|---|
| DeMark 9-Count | +12% | −9% | +8% | −24% | +9% | −7% |
Where it worked
By kind of stock: how often it beat holding on risk-adjusted return, and the median Sharpe ratio gap.
| Group | Beat holding, risk-adjusted | Sharpe gap |
|---|---|---|
| Micro caps | 67% | +0.02 |
| Real estate | 26% | -0.13 |
| Energy & power | 24% | -0.12 |
| Industrials & materials | 24% | -0.12 |
| Metals & mining | 22% | -0.10 |
| Media & telecom | 20% | -0.10 |
| Software & devices | 18% | -0.15 |
| Consumer & retail | 15% | -0.15 |
| Healthcare | 11% | -0.10 |
| Industrials & rentals | 11% | -0.19 |
| Sectors | 8% | -0.20 |
| Semiconductors | 4% | -0.25 |
| Indexes & ETFs | 0% | -0.20 |
| Big tech | 0% | -0.28 |
| Financials | 0% | -0.27 |
Where it helped most
Sharpe ratio gap against holding, stocks with 3+ years of history
Right now
DeMark 9-Count holds 205 of 377 names as of the Oct 13, 2026 close.
Changed its call in the last two weeks:
Backtest results since 2005 (or as long as each stock has traded), against holding the same stock over the same dates, after 0.05% per switch. Past results don't promise future ones. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.