I decided to accept a fresh await at an former marketplace position designing together with run into how the S&P 500 Index (SPY) has behaved since the showtime of 2007 nether 2 conditions:
* When it is upwards both on a one-day together with a five-day basis
* When it is downwards both on a one-day together with a five-day basis
When the marketplace position has been upwards yesterday together with over the past times calendar week (N = 163 trading days), the side past times side 5 days inwards SPY conduct maintain averaged a loss of -.97% (66 up, 97 down).
Conversely, when the marketplace position has been downwards yesterday together with downwards over the past times calendar week (N = 155), the side past times side 5 days inwards SPY conduct maintain averaged a arrive at of .20% (86 up, 69 down).
What seems to endure happening is that markets that are upwards or downwards most late together with over the terminal few days conduct maintain short-term together with swing traders leaning the incorrect way. When they unwind their bets to protect their capital, they contribute to countertrend moves.
In the past, I've written nearly how to lose coin inwards the stock market, including how to lose past times buying into uptrends. Those lessons look relevant inwards the electrical flow environment: it's when stocks await evidently potent or weak that markets are most likely to confound human nature together with nosotros are most probable to run into countertrend behavior.
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