I’ve discussed before
the propensity for Tuesday to serve as a day where short-term selloffs reverse. Historically it has outperformed every other day of the week in this regard. Last night I examined SPY performance following at least 5 straight down days going into Tuesday. Those results are below.
Instances are low but the stats are overwhelmingly bullish over the 1st 3 days. Of further note, all 10 instances managed to close above the entry price at some point in the next 3 days. So even when Tuesday failed, it was made up for on Wednesday or Thursday.
2 comments:
Rob-
Your analysis here dovetails w that of your colleague Woodshedder, who often dissects the market patterns in similar ways as you do.
I do not usually like to put links to other bloggers in a comment, but in this case the two studies should be up on the screen in parallel windows..
http://ibankcoin.com/woodshedderblog/2011/08/02/6-consecutive-lower-closes-whats-next/
Rob,
What a crazy day. I did some quick looks and SEVEN red bars are nearly non-existent. Tomorrow (Wednesday) will be interesting.
Bill
snaptrader.blogspot.com
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