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Rolled Over

By

Steamroller

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In the movie Strange Brew, Bob and Dough McKenzie made famous the term "steamroller." In our world, Boo just put together a three day "steamroller" of his own.

Today's charts are intended to show the rarity of this decline and give us a glimpse of what happened in the past. The SP futures posted a new 100 day high close on Friday (what a distant memory that is) and then closed below the prior day's low for three consecutive days with a cumulative loss of at least 3%. This has only happened on four prior occasions and the charts are listed below. I've circled the four day pattern and highlighted the fifth day (which corresponds to today). The next day closed higher in three of the four. Given the lower prices overnight, it's important to note that only one of the four opened lower and that day closed with the greatest gains. As always, past performance does not indicate future results.

Remember that today is the roll date for the equity futures contracts. The SP futures will trade the June contract today (SPM). On the downside, the SPM will fill a gap from Jan. 2 at 1108.10 and will retrace the 2003 close with trade to 1109.80. Keep that in mind as the overnight prices flirted with those levels.


No positions in stocks mentioned.

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