Potential for a Higher Close, Black Candlestick

S&P futures are in the process of posting a sixth consecutive day of gains, although we’re still trading below the open. That leaves open the possibility of a higher close but a black candlestick, a generally negative indication for the following session when it comes after a series of rally days. Looking back at times when S&P futures formed a similar pattern of three rally days (higher closes, white candles) followed by a fourth higher close that coincided with a black candle, we can see that the settlement below the open typically ushers in a very short-term change of trend. Since 1995 we’ve seen this specific pattern a total of nineteen times, only one of which led to a meaningful gain the following session…

Higher Close, Black Candle After Three Rally Days
07/21/09… S&P futures -0.4% next session
01/06/09… S&P futures -2.7% next session
05/30/08… S&P futures -1.1% next session
11/30/07… S&P futures -0.6% next session
04/09/07… S&P futures +0.1% next session
11/16/06… S&P futures -0.0% next session
09/15/06… S&P futures +0.2% next session
04/21/06… S&P futures -0.2% next session
03/17/06… S&P futures -0.2% next session
07/14/05… S&P futures -0.0% next session
11/01/04… S&P futures -0.0% next session
05/28/03… S&P futures -0.3% next session
10/20/98… S&P futures -0.1% next session
01/30/98… S&P futures +1.6% next session (*)
06/16/97… S&P futures -0.2% next session
12/20/96… S&P futures -0.4% next session
05/15/96… S&P futures -0.1% next session
02/07/95… S&P futures -0.1% next session
01/27/95… S&P futures -0.3% next session

Categories : Archived Intraday Commentary, Intraday Commentary

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