The range over the last week has been extremely tight. Every SPY close in the 5 days since 8/7 has been within the daily range of that 8/7/12 bar. It is said that consolidations are often resolved in the direction of the trend. This guideline suggests that we’re more likely to see another leg up from here than a breakdown. The study below puts this to the test.
It certainly appears the old technical adage has some merit. Results favor the long side over the immediate 3-day period and they are even more impressive when looking out 8 to 10 days.