Wednesday, July 30, 2008

A Quick Recovery

After falling hard yesterday the market made up all of those losses and then some today. Historically, these kind of sharp recoveries have been bullish over the next couple of weeks. Below is a study which exemplifies this:

Of the 19 instances, 6 of them dipped below the low of the “big down day” at some point in the following 12 days.

Overall, action seems to have turned more constructive in the last two days.


Anonymous said...

when you see buy 100 spx. are we talking 100k in spy ?

Marc said...

That's what the spreadsheet says at the top...

Rob Hanna said...

Anon -

It's actually a fictional $100k in the cash index. I don't use SPY here for 2 reasons: 1) Limited history 2) Divdends