Tuesday, August 14, 2012

Why The Recent Move Higher May Signal More Gains

One possible market positive is that prior to small drop Monday's drop the SPX was locked in a persistent rally. I've shown a few different ways in the past that persistent rallies are unlikely to end abruptly. Instead they will either continue higher after a brief pullback, or action will become choppy prior to a sizable move lower. This is shown in the study below.

We see here a decent edge that becomes stronger and more consistent as you look out over the next several days.  The 9-10 day time frame shows exceptional stats.  The 2-day timeframe suggests a quick little boost is also likely.

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