Friday’s close was the sixth consecutive positive close in a row. In the following chart, you can see this is pretty rare and has a high probability of leading to a pullback the following day (I drew a yellow line for the 5/6 days up from 2006-07 to clarify where they occurred). There is no telling the size of the move this way. It could be .1 /ES point, a camel tit or a horse nuke. All you really have is the strong expectation that the day itself should close lower. If Monday’s close is higher, than what I said above would be equally as true for Tuesday.
Also reflecting the possibility of a weekly pullback is that weekly breadth is overbought. I have marked on the following chart that breadth is in an area that can lead to a 1-3 or 5-10 day pullback. That said, the breadth of this move has been very bullish (also shown on chart), which is exactly what you want to see when you break out of a congestion area (1085-1120). Since we are only 25 points above the aforementioned area, it seems probable that a pullback could take price back into that range. However, unless breadth is really negative (multiple +2 std. dev. days in my strength reading), it should be another dip to buy.
14 Responses to What To Look For Next Week
Thanks for the update, didn’t realize it was 6 days, for that matter didn’t even realize it was a Saturday. I was wondering why there was no pre-market activity.
Agreed. Thanks for the reminder, I had not realized we had done that well. I am expecting a “Monday” effect (make that “hoping for”) but given the PPT score etc, it will likely be a good idea to free up some coin.
I was just reading a statistical analysis of the surprising number of UP days we’ve had on Mondays since the indices have rallied off their March lows. Technically, the market has continually stymied the bears. I try not to buy on Fridays because you never know what kind of negative news will adversely affect the markets before Monday’s opening bell, but it has been profitable for those who have.
^ check the timestamps on that, we were typing the same thing at the same time. Odd.
Anyway, here it is:
“Since the March 9th, the Dow has had 30 “up” Mondays (or Tuesdays after a Monday holiday) out of a possible 43. That’s equal to 70 percent. And 16 of the past 18 Mondays being “up”…equals 89 percent. Then incredibly, 80 percent of all the point-gains since March 9th came on those 30 Monday up-days.”
This dudes math is not verified, but I assume (big mistake?) that it’s correct.
I read somewhere that Monday’s since the march low have a strong propensity to be up (~80%) and that a similar percentage of the total rally gains have occurred on monday’s (all paraphrasing). So in that regard a monday close higher in particular wouldn’t be surprising, even though the stats suggest a strong chance of lower.
I’m looking for a monday short into tuesday, while trading with a long bias intraday on Monday (unless conditions warrant another approach).
OK, this has happened to me twice – posting an almost identical thought at the same time as another poster. Isaw that on Slope earlier, Danny, and posted it on a forum at Stockpickrs.
By now I’ve grown accustomed to seeing bearish indicators as short squeeze indicators. Have you not? Great work on the IBC dictionary laudable kind sir.
definitely possible, and yes, some overbght indicators can stay overbought.
Like a roulette wheel. Those stats are great.
Something tells me Merger Monday is coming back. I look for the Trillion on American business balance sheets to start going to work quickly.
Love your Chargers. No way Indy goes this year.
yup, Chargers are rocking. I’m going to the game. Hopefully Norv doesnt fuck it up
I’ve been watching this too!
As such, (because I can only buy at the end of the day in order to be in the next day…Profunds), I’m light for Monday and hoping to pile on for the dip, when ever it comes.
Your statement confirms my thinking and your strategy though not identical is similar: “I’m looking for a monday short into tuesday, while trading with a long bias intraday on Monday (unless conditions warrant another approach)”.
Nice to know that in a general sort of way, we’ve of the same mind.
Monday was up but AA may push Tuesday down. Time will tell.
Nice just terrific!