Such persistence doesn’t typically last much longer before a pullback is seen. We see above what appears to be a decent downside edge. It appears most of the downside damage is done in the first 2 days.
Tuesday, February 15, 2011
This Study Suggests the Market is Due for a Pullback
Since the 1/28 market drop due to Egyptian protests the market has risen without hardly a pause. It has now been 2 weeks since the last time SPY closed above its 5-day moving average. The 5-day is quite short-term so this is a fairly rare occurence. The study below examines other instances where this has happened.
Such persistence doesn’t typically last much longer before a pullback is seen. We see above what appears to be a decent downside edge. It appears most of the downside damage is done in the first 2 days.
Such persistence doesn’t typically last much longer before a pullback is seen. We see above what appears to be a decent downside edge. It appears most of the downside damage is done in the first 2 days.
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4 comments:
hi. I´m trying to understand from where you get that 89% probability.
I don´t see it in the table or I´m confused.
It's not in the table. It is a separate piece of info. It simply looks at whether there was a close below the "entry" or "trigger" price at any point in the next 4 days. So if it closed lower day 1 but then rose and was trading higher a few days later, it would still count. You just need 1 lower close in the next 4 days to count for that stat.
Rob
ah ok, thank you. Now I understand.
I have other question.
What is the probability of any given day to see a close below that day in the next 4 days?
Fot that time period it appears a little under 70%.
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