Buy the SPY After 5 Consecutive Higher Closes?
It would be better to wait a week or so, but the sample size is small.
My tests require the SPY to be trading beneath both the 50 and 200 day moving averages (as it is now).
The sample size was small with only 8 occurrences over all SPY history, including buying today at the close.
No commissions or slippage was used. All buys and sells were made at the close.
The horizontal axis shows the number of days after the buy was made. The above graph shows that over an intermediate time frame, this is a bullish development. Over a short time frame, not-so-bullish.
This graph shows that it is not a high-probability trade to be buying after 5 consecutive higher closes on the SPY.
10 Responses to Buy the SPY After 5 Consecutive Higher Closes?
awesome work
Like or Dislike: 
0 
0
Interesting. Thanks
Like or Dislike: 0 0
I just went back to the past year’s chart for SPY — I take it out of the 8 times it occurred, 3-4 happened in the past two years?
Like or Dislike: 0 0
Marshall, 94, 99, 00, 01, 04, twice in 08, and yesterday.
Like or Dislike: 0 0
Wood,
What’s the label for the x axis? Days after 5 Consecutive higher closes? So on the 19th day, you have 1% profit and 60% of trades are winners?
Like or Dislike: 0 0
Hawaii, x is days after the buy was made. So 1 = 1 day after buying the close. Yes, you are interpreting them correctly.
Like or Dislike: 0 0
Numbers= truth. Thanks.
Like or Dislike: 0 0
No problem. Doesn’t mean the present will be the same as the past though!
Like or Dislike: 0 0
Thanks.
Like or Dislike: 0 0
Actually, from the graphs it looks like a really strong case for going short on the fifth day, hold for two days: 88% chance of winning, an average return of 1.5%!
Thanks!
Like or Dislike: 0 0