Below is a short excerpt from Tuesday night’s Subscriber Letter which addresses Frank’s concern and provides more detail on the setup. It’s fairly common that I include additional information on studies in the Subscriber Letter, and this was one of those instances. As a refresher, the setup involved a 1.25% rise in the S&P 500 and a close below 25 for the Quantifiable Edges Spyx reading.
This setup has been especially bearish during the current bear market. Below are all instances since October 2007 along with their 4-day returns:
Ten for ten to the downside in this case.