7:34 PM CT - Influenza A virus subtype H5N1 reader kindly pointed out that non all of the atmospheric condition of the query below were met today, equally nosotros made a 4 24-hour interval low, exactly non 4 consecutive lows inward SPY. I believe the pith of the query is correct, exactly delight receive got it alongside multiple grains of salt!
This morning's post discussed the value of historical query for perspective together with gave an event that proved helpful during today's trade.
One substitution to doing historical query good is finding what makes the electrical flow marketplace unique together with distinctive, because--on average--that's where the greatest potential edges are to last found.
For example, nosotros traded at a 20-day depression today inward the S&P 500 Index (SPY) together with made a 4th consecutive lower low. This blueprint has occurred 76 times since 2000. Two days later, SPY has averaged a sizable gain of 1.03% (53 occasions up, 23 down). By contrast, the average two-day gain for SPY for the residue of the sample has been -.05% (1157 up, 1134 down).
What that suggests is that, on average, markets that receive got been weak inward the short-term (four days lower lows) *and* weak on an intermediate term (20-day lows) receive got tended to bounce inward the brusk term. That tin hence larn a hypothesis for subsequent trading, together with nosotros tin encounter if marketplace activeness is supporting or disconfirming the hypothesis.
Either scenario provides useful information: whether a marketplace is living upwardly to its historical script or whether it's doing something dissimilar gives us useful data nearly how we're trading. (Hint: Influenza A virus subtype H5N1 historical await suggests that it's the markets that are weakest that neglect to sustain bounces inward oversold conditions.)
.
No comments:
Post a Comment