S&P Shrugs Off Down Open, Hits New High for Week

A down open was met with better buying pressure Friday and S&P futures closed above the previous day’s high,  similar to Thursday’s session in which the S&Ps opened flat and closed above the previous day’s high. I discussed a very similar two-day price pattern in this January 6th column which I’ve updated below with the slight adjustment to include flat or down opens (rather than only down opens). The track record is essentially the same as the one shown in that 1/6 post…

S&P Futures Open Unch’d or Lower, Close >Previous Day’s High Two Days
02/12/10… S&P futures ??? two sessions later
01/08/10… S&P futures -0.7% two sessions later
01/07/10… S&P futures +0.5% two sessions later
01/06/10… S&P futures +0.8% two sessions later
08/20/09… S&P futures +2.0% two sessions later (*)
07/27/09… S&P futures -0.5% two sessions later
03/18/09… S&P futures -3.5% two sessions later
11/28/08… S&P futures -5.2% two sessions later
09/12/08… S&P futures -3.4% two sessions later
02/26/08… S&P futures -1.2% two sessions later
10/25/06… S&P futures -0.3% two sessions later
10/24/06… S&P futures +0.6% two sessions later
10/16/06… S&P futures -0.3% two sessions later
10/05/06… S&P futures -0.1% two sessions later
03/15/06… S&P futures +0.2% two sessions later
02/15/06… S&P futures +0.7% two sessions later
12/14/05… S&P futures -0.6% two sessions later
11/23/05… S&P futures -0.6% two sessions later
05/17/05… S&P futures +1.4% two sessions later (*)
02/25/05… S&P futures -0.2% two sessions later
10/28/04… S&P futures +0.3% two sessions later
09/02/04… S&P futures +0.2% two sessions later
05/26/04… S&P futures +0.4% two sessions later
03/05/04… S&P futures -1.6% two sessions later
01/07/04… S&P futures -0.5% two sessions later
12/23/03… S&P futures -0.0% two sessions later
06/05/03… S&P futures -1.4% two sessions later
07/31/02… S&P futures -5.1% two sessions later
11/26/01… S&P futures -2.2% two sessions later
10/03/01… S&P futures -0.2% two sessions later
01/11/01… S&P futures +0.1% two sessions later

In 20 out of the past 30 occurrences, or 67% of the time, the S&P closed lower two sessions later, compared with 48% at-any-time odds for a lower close two days later in the same time frame. In only two cases was the S&P up 1% or more two days later, while it fell 1%+ eight times. Overall it’s not quite enough to qualify as a significant edge, but it does suggest limited upside potential during the first half of the coming week.

With S&P futures posting a second consecutive higher high on increasing volume Friday, we’ll want to keep an eye on the relative volume charts should we see another higher high on Tuesday. Increased volume above Friday’s level would trigger the three-day buy signal outlined in this column from January 6th.

Categories : Archived EOD Commentary, End-of-Day Commentary

 Print This Post