Friday, October 23, 2009

Back to back 7-day reversals - a rare setup

More of an oddity than a quantified edge this morning…

The last two days we’ve seen opposing reversals. Wednesday the market made a new high but closed down on the day. Thursday it hit a 7-day low before reversing to close up on the day. A reversal off a 7-day high followed by a reversal off a 7-day low would seem a bit unusual. I looked back to 1978 and found out just how unusual it was. Below is what I found.

It’d be dangerous to trade based off of just a sample set of 5, but I was still fairly amazed that there wasn’t a single instance of a profitable close within the next 4 days.


DONG said...

since there is only 5 instances, would you be able to show the dates where all 5 took place, maybe we could see any meaningful edge in the intermediate term

Jason said...

Rob, this is off topic, but I was wondering why your Hanna ETF money flow system isn't available anymore?

Rob Hanna said...


Sorry I was slow to get back to the comments. Next time I run a study with so few results I'll make sure to post the dates.

TradingMarkets stopped selling it after a year or so. At this point it would need some updating. Perhaps a project for down the road...