Buying all time high

Some days back I linked to this study on stocks making all time high.
The Capitalism Distribution - The Realities of Individual Common Stock Returns
by Eric Crittenden and Cole Wilcox, BlackStar Funds

If you read this study carefully, there is a way to build a trading system around it. The basic point of the study is that there is an edge in investing in stocks making all time high. Now if you read Jesse Livermore book How to Trade In Stocks on page 36 in the chapter titled "The Pivotal Point" he has this key paragraph:

For instance, let us say that a new stock has been listed in the last two or three years and its high was 20, or any other figure, and that such a price was made two or three years ago. If something favorable happens in connection with the company, and the stock starts upward, usuallyitis safe play to buy the minute it touches a brand new high.

In next paragraph he describes a reverse of above situation where a stock makes a all time low after trading in a range for few years afterIPO.

A stock may be brought out at 50, 60, or 70 a share, sell off 20 points or so , and then hold between high and low for a year or two. Then it ever sells below the previous low , that stock is likely to be in for tremendous drop. Why? Because something must have gone wrong withthe affairs of the company.

So this is an old idea. Ed Seykota also talked about similar thing many years ago. If you look at the CANSLIM method, one of the catalyst in new high. IBD also marks stocks making all time high with NH notation in tables.

A a system based on buying all time high and selling short all time low. There is an edge in it. Only problem is in bull market it gives too many signals, often more than 1000 stocks will make all time high in bull market. In addition in severe bear markets stocks gets beaten down so much, that if you wait for all time high to get in , you lose bulk of the move.