The intraday (buying) opportunity presented yesterday on the blog (see Intraday Opportunity after a Sell-off ) played out nicely today (Thursday, November 10). S&P 500 futures were trading lower approximately -0.40% below Wednesday's close on today's GLOBEX overnight session, but turned around for a huge gap up on the open (SPY up +1.32% on the open).

The market recouped some of yesterday's losses today, but closed -0.38% below the open (a 'black candle'), immediately following a session when the SPY (S&P 500 SPDR) closed -2.02% below the previous session's (Tuesday's) close. This might trigger another favorable trading opportunity on the long side of the market on tomorrow's (Friday, November 11) 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 session ('Effective Day', in this event on Friday, November 11) in the event the SPY closed lower -2.00%+ below the previous session's close (a sell-off like on Wednesday, November 9), immediately followed by a black candle where the SPY closed at least -0.25% below the open (the magnitude of change - even the algebraic sign - on the close doesn't matter).

Out of 29 occurrences since 1990, the SPY was always ( Up vs. Down 29 : 0 ) trading above the previous session's close at least once during the then following regular session (and ≥ +1.0% on 20 occurrences, or almost 70% of the time). In addition, it was trading below the previous session's close at least once during the then following session on 26 out of 29 occurrences (or 90% of the time), thereof penetrating its previous session's low on 21 occurrences, the former (trading above the previous session's close) significantly better, the latter significantly worse than the market's at-any-time chances for trading highr| lower on the then following session. Respective t-scores are always significantly exceeding the +/- 1.645 mark for statistical significance (there is a very low chance that the edge on the up- and downside occured by pure chance only).

Conclusion(s): We might get some action and intraday volatility on Friday, November 11 again, and another favorable trading opportunity especially on the long side of the market might be provided in the event of a lower open on Friday, November 11, or weakness on Friday's GLOBEX overnight session.

Successful trading,