Coiled and Ready
Handicapping the next day's direction continues to be more of a 'prediction' than a 'probability.' I've not penned too many posts this week because the recent action simply hasn't generated any historicals of interest.
But there's a few things that point to a decent move today:
- For the sixth day in a row, the SP futures closed in the opposite direction of the prior day. Since the March 2003 low, there have been five similar patterns. In four of the five, the next day's close was up or down by at least 1.1%.
- The all-important SOX index posted back to back inside days and recorded the narrowest range of the year yesterday.
This morning's PPI report could exaggerate the day's open but I think we should be on alert for a trendy day. To confirm the direction, watch the SOX. A move outside yesterday's range that sticks is probably the first 'tell.'
Be aware of the upside bias for tomorrow's open. On expiry Friday, the SP futes opened higher in nine of the last twelve months. As always, past performance does not indicate future results.
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