Daily Commentary - Posted on Friday, March 27, 2009, 8:14 PM GMT +1
Friday's sessions mirrors Thursday's session
FRIDAY’S SESSION MIRRORS THURSDAY’S SESSION
Thursday’s session was already remarkable due to the fact that the S&P 500
- posted a higher open,
- posted a higher high than the previous session’s high,
- posted a higher low than the previous session’s low,
- posted a low above the previous session’s close,
- posted a higher close,
- and finally closed above the open.
(see my posting Trading the Odds on Friday – March 27, 2009)
but -going into the final hour- Friday’s session (at least as I type this post) seems to completely mirror Thursday’s session due to the fact that the S&P 500
- already posted a lower open,
- already posted a lower low than the previous session’s low,
- up to now only posted a lower high than the previous session’s high,
- up to now only posted a high below the previous session’s close,
- currently would’ve posted a lower close,
- and would currently close below the open.
Unfortunately -from a statistical point of view- those may be disappointed expecting that this time probabilities and odds would favor a bullish (intraday) tendency for Monday’s session mirroring the (expected) bearish tendency for today’s session (with the exception of a probable higher open).
Since 01/03/2007, there were 84 occurrences which fulfilled the setup with those (bearish) ‘6‘ lows listed above, thereof 51 with a higher open on the next session than the previous session’s close (as today’s close will probably be), and 33 sessions with a lower open. The respective probability of 60.71% for a higher open on Monday’s session would hence be significantly above the respective at-any-time probability of 41.56%, BUT the respective probabilities for a higher high (22.61%) are significantly below and those for a lower low (76.19%) are significantly above the respective at-any-time probabilities for a higher high (48.05%) and lower low (50.65%), forecasting (at least a temporary) intraday weakness for Monday’s session.
From a statistical point of view Monday’s session may see a bullish start with a probably higher open, but loosing steam after the open to probably post a lower low during the session. The probability for a higher/lower close is comparable to the respective at-any-time probability.
The column ‘w/Survey I‘ shows the respective figures concerning the setup mentioned on top of the post (and the S&P 500’ behavior the next session), ‘w/Survey II‘ -for comparing purposes- the respective figures concerning those sessions posting a lower close only (that means the S&P 500’ behavior the session after the S&P 500 posted a lower close, not the session with the lower close, and not taking into account any lower open, lower high, lower low …, but a lower close as the one and only condition).
(click on image to enlarge)