Modest Gain after Sharp Intraday Drop Points to Further Downside
By
Rennie on Friday, August 26th, 2011 at 12:01 pm
The S&P has rebounded from a 2% intraday selloff and is currently up just under 1%. If it closes with a gain today of less than 1%, it would set up a short-term sell signal for the early part of next week. Historically, ‘recovery days’ do not generally see follow-through over the near-term. In fact odds favor a resumption of the downtrend over the next 1-2 days. The table below lists each of the last 30 instances in which the S&P500 recovered from a 1.5% intraday deficit to close with a modest gain (<1%)…
S&P Down 1.5%+ Intraday, Closes Up Less Than 1%
08/03/11… Lower SPX close one session later
05/25/10… Lower SPX close one session later
05/17/10… Lower SPX close one session later
02/05/10… Lower SPX close one session later
03/25/09… Lower SPX close three sessions later
03/06/09… Lower SPX close one session later
02/12/09… Lower SPX close one session later
01/23/09… No lower close within two sessions five
01/16/09… Lower SPX close one session later
01/15/09… Lower SPX close two sessions later
12/12/08… Lower SPX close one session later
11/25/08… Lower SPX close three sessions later
11/18/08… Lower SPX close one session later
09/26/08… Lower SPX close one session later
09/05/08… Lower SPX close two sessions later
07/01/08… Lower SPX close one session later
03/13/08… Lower SPX close one session later
08/16/07… No lower close within two sessions
08/10/07… Lower SPX close one session later
06/08/06… Lower SPX close one session later
05/12/04… Lower SPX close one session later
03/20/03… Lower SPX close two sessions later
02/25/03… Lower SPX close one session later
10/23/02… Lower SPX close one session later
08/09/02… Lower SPX close one session later
07/30/02… Lower SPX close two sessions later
07/11/02… Lower SPX close one session later
06/24/02… Lower SPX close one session later
10/05/01… Lower SPX close one session later
03/01/01… Lower SPX close one session later
In 26 out of the last 30 occurrences, or 87% of the time, the SPX posted a subsequently lower close (below the setup day’s close) within the next two sessions, a significant edge over the 61% random chance.
Modest Gain after Sharp Intraday Drop Points to Further Downside
By Rennie on Friday, August 26th, 2011 at 12:01 pmThe S&P has rebounded from a 2% intraday selloff and is currently up just under 1%. If it closes with a gain today of less than 1%, it would set up a short-term sell signal for the early part of next week. Historically, ‘recovery days’ do not generally see follow-through over the near-term. In fact odds favor a resumption of the downtrend over the next 1-2 days. The table below lists each of the last 30 instances in which the S&P500 recovered from a 1.5% intraday deficit to close with a modest gain (<1%)…
S&P Down 1.5%+ Intraday, Closes Up Less Than 1%
08/03/11… Lower SPX close one session later
05/25/10… Lower SPX close one session later
05/17/10… Lower SPX close one session later
02/05/10… Lower SPX close one session later
03/25/09… Lower SPX close three sessions later
03/06/09… Lower SPX close one session later
02/12/09… Lower SPX close one session later
01/23/09… No lower close within two sessions five
01/16/09… Lower SPX close one session later
01/15/09… Lower SPX close two sessions later
12/12/08… Lower SPX close one session later
11/25/08… Lower SPX close three sessions later
11/18/08… Lower SPX close one session later
09/26/08… Lower SPX close one session later
09/05/08… Lower SPX close two sessions later
07/01/08… Lower SPX close one session later
03/13/08… Lower SPX close one session later
08/16/07… No lower close within two sessions
08/10/07… Lower SPX close one session later
06/08/06… Lower SPX close one session later
05/12/04… Lower SPX close one session later
03/20/03… Lower SPX close two sessions later
02/25/03… Lower SPX close one session later
10/23/02… Lower SPX close one session later
08/09/02… Lower SPX close one session later
07/30/02… Lower SPX close two sessions later
07/11/02… Lower SPX close one session later
06/24/02… Lower SPX close one session later
10/05/01… Lower SPX close one session later
03/01/01… Lower SPX close one session later
In 26 out of the last 30 occurrences, or 87% of the time, the SPX posted a subsequently lower close (below the setup day’s close) within the next two sessions, a significant edge over the 61% random chance.