Oil Up Huge Today... Any Edge?

Hey Traders,

  Oil is up by a significantly large amount today. Let's look at what typically happens after such a surge (tested since 2002):

This study is showing short-term weakness statistically, with the most bearish outlook in the next 2 weeks (10 trading days). However, the price of oil has been down large over the past 2 months. Let us see if factoring that in has any significant relevance:

You can see it definitely does not change it for the better! This study checks for 5% or more up days in oil, when the overall trend is significantly down. This shows a heavy downside pressure in the next 2 weeks. Albeit, most of these occurrences were in the decline of 2008, so you must take that into consideration.

Hope this helps!

Julian

June 29th 2012 Market Update

Strong Days In A Medium Term Market Pullback (S&P 500)

Good Morning Traders!

   It looks like we are going to have a very strong up day today, in an overall weaker market (in a much longer-term uptrend). Here's a study I ran for looking for similar occurrences:

Now you might ask, wait a minute, it looks like today we might close ABOVE the 50 day moving average, why would you include today as a potential opportunity from this test? The main reason is because the filters we have on (below 50, above 200), are just that. We are not assuming that the 50 day and 200 day are magic numbers, we are just assuming that if the market is above the 200 day yet below the 50 day, we are typically in a medium term pullback, in a longterm uptrend (which is the case today). We are just looking for similar occurrences.

In the end it appears that this study is averaging further movement higher in the next month (out of 90 data points, the market has been higher a month out after a day like today 70% of the time). Usually days like this signal a change in overall market sentiment.

If anyone is looking at a specific market pattern and would like me to study it and its average returns, feel free to comment on this blog!

Hope this helps!

Julian

S&P (SPY) Historical Test

Hey Traders,

   Below is a study I've done on the S&P 500, through SPY, testing back to 1993.

The S&P 500 has pulled back roughly 4% in the last 50 days (since the April top), is below the 50 day moving average, but above the 200 day moving average (indicating short-term bearish, but long-term bullish). Over the last 19 years, this occurrence has been statistically bullish for the S&P 500, specifically 25 days out (roughly a month).


Just more information to add to your toolbox when making a decision!


Julian

Quick Gold Statistic

Hey Traders,

   Below is a study I've done on Gold, testing the last 10 years.

Gold has fallen roughly 4.1% over the last 10 trading days and is currently trading under the 50 day moving average. Historically, it seems gold would be a good buy, for roughly a 4% return after 50 trading days. (70% win rate over last 10 years).

Hope this helps!

Julian

Vacation!

Hello Everyone!

  Just want to update everyone that I will be taking a month off from blog posting and tweeting starting this Sunday.

Look forward to more posts this summer!

Julian

June 1st 2012 Market Update; Current Positions