This suggests Tuesday’s failure to turn around simply appears to be a delay rather than a bad omen.
Wednesday, August 25, 2010
No Turnaround Tuesday...how about Wednesday?
Yesterday I showed a study related to Turnaround Tuesdays. I showed that when the market makes 3 down days going in to Tuesday there has been a decided upside edge. Well, that edge certainly did not play out Tuesday. So what happens when Turnaround Tuesday fails to ignite a turnaround? I went back to 1980 for this test to get a good number of instances.
This suggests Tuesday’s failure to turn around simply appears to be a delay rather than a bad omen.
This suggests Tuesday’s failure to turn around simply appears to be a delay rather than a bad omen.
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2 comments:
Does the Tuesday part actually matter? I'm pretty sure that the market almost always bounces after 4 down days in a row.
Perhaps it’s both a delay AND a bearish portent.
The concept is one of oversold mean reversion. Any time such setups respond weakly--or late--it's worth squinting at, as to whether it may represent a possible early warning of major trend change or "sea change".
I find the same is true with seasonal strength patterns. If they don't pan out, it sometimes can be a lead warning of longer-timeframe weakness ahead.
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