Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Bad Mondays



The SP futures are down significantly. A number of factors set the stage for a down close today and an up close tomorrow. First, I wanted to see what happens to the SP futures on a Monday when Friday's close was down by at least 1.5%. There were 79 occurrences and the close was mixed. By adding that Monday's open was lower by at least .5% (as the futures currently suggest), the number of occurrences reduced to 21 and the close lower in 76% of them. From there, I stipulated that the bond futures also closed lower on Friday. Why? A lower close in the bond takes out possible "flight to quality" scenarios from the prior day. Under this condition, the sample reduced to thirteen and the close lower in eleven of them (see table below).

Here's a few observations: First, the intraday high was positive in just four of the results. This strongly suggests a "sell rally" approach to the day. Secondly, the close was lower than the open in all but one of the eleven that closed lower.

Okay, this may be a little presumptive but I wanted to look ahead to Tuesday in case the analog accurately predicts today's close. The table above shows eleven results that closed lower. Of those eleven, the open of the SP on Tuesday was higher in all but one and the close higher in all but three.

There's a lot of action between now and tomorrow Minyans but sometimes a look at history can help formulate a trading strategy. Most of all, remember that past performance does not indicate future results.

< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos