• 656 days Will The ECB Continue To Hike Rates?
  • 657 days Forbes: Aramco Remains Largest Company In The Middle East
  • 658 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,058 days Could Crypto Overtake Traditional Investment?
  • 1,063 days Americans Still Quitting Jobs At Record Pace
  • 1,065 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,068 days Is The Dollar Too Strong?
  • 1,068 days Big Tech Disappoints Investors on Earnings Calls
  • 1,069 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,071 days China Is Quietly Trying To Distance Itself From Russia
  • 1,071 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,075 days Crypto Investors Won Big In 2021
  • 1,075 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,076 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,078 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,079 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,082 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,083 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,083 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,085 days Are NFTs About To Take Over Gaming?
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Frank Hogelucht

Frank Hogelucht

Individual investor, trading for a living since 2007, taking a statistical approach in combination with historical market data and addicted to developing market-neutral algorithmic trading…

Contact Author

  1. Home
  2. Markets
  3. Other

Intraday Opportunity After a Sell-Off

Again a couple of news from China and Italy (Italy 10-Year Bonds up over 10% this morning) drove markets significantly lower today.

The SPY (S&P 500 SPDR) closed lower -3.69%, while at the same time the S&P 100 Volatility Index (VXO) closed up +38.46%. On the NYSE there were 8 declining issues for every advancing issue, and declining volume outnumbered advancing volume by a wide (to be polite) margin of 40 : 1.

But as already posted during the day ( see Implications of Fear ($VXO) and a Lower Close ), today's severe sell-off might provide a favorable trading opportunity on tomorrow's (Thursday, November 10) session (in the event of a lower open or additional weakness on the GLOBEX overnight session). Table I below shows all historical occurrences and the SPY's intraday performance on the then following sessions ('Effective Day', in this event on Thursday, November 10) in the event the SPY closed lower -3.50%+, at the same time near its intraday lows (bottom 12.5% of its intraday range).

Historical Occurrences and Returns

Out of 31 occurrences since 1990, the SPY was always trading at least +0.70% above the previous session's close at least once during the then following regular session (and ≥ +1.0% on 28 occurrences, or almost 90% of the time), but had its difficulties to penetrate its previous session's high (it managed a higher high on only 2 occurrences). In addition, it penetrated its previous session's low on 4 out of every 5 occurrences, both significantly worse than the market's at-any-time chances for posting a higher high and a higher low.

Table II below shows all historical occurrences and the SPY's intraday performance on the then following sessions ('Effective Day', in this event on Thursday, November 10) in the event the NYSE Adv./Decl. Issues came in 1 : 8 (or even worse), at the same time NYSE Adv./Decl. Volume came in 1 : 40 (or even worse), not taking into consideration any price action (e.g. the magnitude of change on the close).

Historical Occurrences and Returns

Out of 16 occurrences since 1990, the SPY was always trading at least +0.64% above the previous session's close at least once during the then following regular session (and ≥ +1.0% on 11 occurrences), but had (again) its difficulties to penetrate its previous session's high (it managed a higher high on only 1 occurrence). In addition, it penetrated its previous session's low on 2 out of every 3 occurrences, both significantly worse than the market's at-any-time chances for posting a higher high and a higher low.

Conclusion(s): Aa (significantly) lower open on Thursday, November 10, and/or any follow-through of today's weakness on tonight's GLOBEX session might provide a favorable buying opportunity, targeting an exit price at least +0.70% above today's close (not taking into account any news and headlines).

Successful trading,

 

Back to homepage

Leave a comment

Leave a comment