As you can see the numbers are very strong. Not seen in the above table is the fact that 33 of the 34 instances closed above the entry price at some point in the next 4 days. This all points to a strong likelihood of a bounce.
Tuesday, August 20, 2013
3 Lower Highs, Lows, & Closes Going Into Tuesday
At Overnight Edges yesterday I noted that there was a strong bullish overnight edge when ES had made at least three consecutive lower highs, lows, and closes. I’ve also discussed in the past that Tuesdays are known for their turnaround capabilities. The study below uses SPY and it looks at swing-term implications of the 3+ days of lower highs, lower lows, and lower closes when today is Monday.