Crash Monday? Perhaps, but Unlikely.

[smwinc 20]

"Friday's decline of 3.24% for the Dow was the first -3% day since February 27th, 2007, and just the third of the bull market (if it still is one) that started in October of 2002.

 

Below we highlight all -3% days for the Dow Jones Industrial Average post WWII. The average change on the day following the 60 prior occurrences has been 0.11%, while the average change over the next week has been 0.28%. Going back 10 years, the average performance on the next day has been 0.63%." (Bespoke Investment Group)

 

"With the S&P 500 currently down 1.88%, the index is set to have been up more than 1.5% yesterday and down more than 1.5% today. Over the last 50 years, this has happened just 30 other times. The average change following these 2-day whirlwinds has been 0.14% on the following day and 0.56% over the following week. During the current bull market (since 10/9/02), the occurrence has happened 5 times, and the index has been up more than 1.2% the next day every time for an average change of 2.17%. "

 

Source: http://bespokeinvest.typepad.com/

 

This isn't a prediction - I'm not going to be long and turning my computer off, but I like to keep it in perspective.

 

On the otherside of the coin, if we do sell off, it will hold even greater significance.

 

Have fun

[firewalker 10]

"Friday's decline of 3.24% for the Dow was the first -3% day since February 27th, 2007, and just the third of the bull market (if it still is one) that started in October of 2002.

 

Below we highlight all -3% days for the Dow Jones Industrial Average post WWII. The average change on the day following the 60 prior occurrences has been 0.11%, while the average change over the next week has been 0.28%. Going back 10 years, the average performance on the next day has been 0.63%." (Bespoke Investment Group)

 

"With the S&P 500 currently down 1.88%, the index is set to have been up more than 1.5% yesterday and down more than 1.5% today. Over the last 50 years, this has happened just 30 other times. The average change following these 2-day whirlwinds has been 0.14% on the following day and 0.56% over the following week. During the current bull market (since 10/9/02), the occurrence has happened 5 times, and the index has been up more than 1.2% the next day every time for an average change of 2.17%. "

 

Source: http://bespokeinvest.typepad.com/

 

This isn't a prediction - I'm not going to be long and turning my computer off, but I like to keep it in perspective.

 

On the otherside of the coin, if we do sell off, it will hold even greater significance.

 

Have fun

 

Interesting statistics, but as each moment in time is ultimately unique, I doubt you could actually benefit from this knowledge somehow

[smwinc 20]

It depends how you trade. Some people find it useful. A fair wack of quant, spreading, etc. is based around looking at the behaviour of a given set of variables (e.g. a market in relation to movement, or another market) in the past, and what that implies for the future.

[firewalker 10]

It depends how you trade. Some people find it useful. A fair wack of quant, spreading, etc. is based around looking at the behaviour of a given set of variables (e.g. a market in relation to movement, or another market) in the past, and what that implies for the future.

 

I should've formulated my response differently.

 

I agree with what you're saying, but what I meant to say is that none of this translates into a concrete entry or exit Not that is has to...

 

Brett Steenbarger in his books often tells us a bit about his strategy and where goes back in history to compare with a number of very similar trading days to see what happened next in those cases.

[smwinc 20]

I should've formulated my response differently.

 

I agree with what you're saying, but what I meant to say is that none of this translates into a concrete entry or exit Not that is has to...

 

Brett Steenbarger in his books often tells us a bit about his strategy and where goes back in history to compare with a number of very similar trading days to see what happened next in those cases.

 

Exactly - I understood what you were referring to. :thumbs up:

[SunTrader 10]

End of the month, 2nd quarter, 1st half of the year.

 

I think I heard, barring a spectacular rally, the month of June is looking to be 50+ year worst performance.

 

Sell in May and ........

[smwinc 20]

Agreed SunTrader. Please note that I made this post back on the 9th June 2008, referring to the Monday of the 9th June 2008. Not EVERY Monday there-after

[SunTrader 10]

Opps read the whole topic yesterday and then lost fact of the age of the posts.

[mea 10]

Crash Monday? Perhaps, but Unlikely.

 

Who cares, just trade it. We are trader's right? not investors.