First, below is a table showing data when a two-day market rise occurs with increasing Spyx levels:
While not overwhelmingly bullish, there is a clear upside edge over the next 1-10 days based on this pattern – especially day 1. The average day over the entire time period only gained $24, so the difference is substantial.
Now let’s see what happens when only 1 of the days occurs with a rising Spyx:
Very choppy action with a slight negative overall tilt.
What if the Spyx sinks both days while the market rises?
Results here are quite a bit worse on average. It’s still close to a 50/50 proposition but risks clearly outweigh rewards.
I did look at how the 1st (bullish) test has performed over the especially choppy and bearish period from 6/1/07 to now. Over this time there have only been 4 instances and results were split. As challenging as the current market is I’m not prepared to view the results in a clearly bullish light. I do think it’s better than seeing either of the alternatives though.
Lastly, I took a look at running similar tests using straight volume instead of the Quantifiable Edges Volume Spyx to see if it provided the same edges. First I present the “bullish scenario” with two up days on rising volume:
Here again we see an upside bias. The problem is it is not nearly as pronounced as when using the Spyx. In fact it’s about equal with the long-term drift of the market, which suggests no significant edge.
What if we look at the bearish Spyx scenario using volume as a substitute?
Rather than clear downside edge what we have here is again less pronounced. The suggestion is chop rather than true downside.
Several times lately I have substituted Volume Spyx levels for actual volume levels in testing patterns and found the edge to be more pronounced. The S&P 500 volume Spyx is updated each night on the home page. It can be viewed for free. Gold level subscribers are able to download historical data on both S&P 500 and Nasdaq Volume Spyx Levels each night for research or further evaluation.
What if we look at the bearish Spyx scenario using volume as a substitute?
Rather than clear downside edge what we have here is again less pronounced. The suggestion is chop rather than true downside.
Several times lately I have substituted Volume Spyx levels for actual volume levels in testing patterns and found the edge to be more pronounced. The S&P 500 volume Spyx is updated each night on the home page. It can be viewed for free. Gold level subscribers are able to download historical data on both S&P 500 and Nasdaq Volume Spyx Levels each night for research or further evaluation.
I will continue to provide updates and research associated with this newly published tool.
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