The indication was that following a day like Thursday, the SPY had closed up strongly over every 1 and 3 day period. Monday closed marginally higher in the S&P 500, although the SPY closed down 1 cent. Compared to the other 7 instances that were identified in the study, Monday’s action was the weakest. This can serve as a warning sign. When the market doesn’t rally as it is supposed to it may be suggesting a move in the other direction.
It may help some traders to think of such scenarios as they might failed patterns. Take a breakout for instance. When breakout from a triangle or other consolidation pattern fails, it can often lead to a sharp reversal in the opposite direction. The same concept applies to historical studies. When the market doesn’t do what it is supposed to, you need to reassess. Like any other type of analysis, historical analysis requires constant reassessment. The market isn’t static and your analysis shouldn’t be either.