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.
awesome work
Interesting. Thanks
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?
Marshall, 94, 99, 00, 01, 04, twice in 08, and yesterday.
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?
Hawaii, x is days after the buy was made. So 1 = 1 day after buying the close. Yes, you are interpreting them correctly.
Numbers= truth. Thanks.
No problem. Doesn’t mean the present will be the same as the past though!
Thanks.
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!